WASHINGTON – The index of U.S. leading indicators rose more than forecast in November, a sign the economic expansion will gain traction in the months to come.
The Conference Board’s index, a gauge of the outlook for the next three to six months, increased 0.8 percent last month after rising 0.1 percent in October, the New York-based group said Thursday. The median forecast of economists surveyed by Bloomberg called for an advance of 0.7 percent.
Rising stock prices, a firming housing market and gains in the labor market are helping to boost spending among households, whose balance sheets have improved over the last four years. Fading fiscal drag from federal spending cuts in 2014 will also lift growth, supporting demand as the recovery accelerates.
“The economy is generating more momentum, that’s the bottom line,” Ward McCarthy, chief financial economist at Jefferies LLC, said in an interview before the report. “We have steadily seen the economy grow faster over the course of 2013, and that suggests that the economic expansion is getting more strength.”
Estimates from 49 economists in the Bloomberg poll ranged from gains of 0.2 percent to 0.9 percent.
Eight of the 10 components of the leading indicators contributed to the increase, led by a drop in jobless claims and a widening spread between short- and long-term interest rates.
“November data reflect a U.S. economy that is expanding modestly,” Ken Goldstein, an economist at the Conference Board, said in a statement Thursday. The index has been “signaling for some time that the economy is developing forward momentum, and will continue to strengthen through early 2014.”
The Conference Board’s index of coincident indicators, a gauge of current economic activity, rose 0.4 percent in November, the biggest advance since February, after a 0.1 percent gain the prior month.
The coincident index tracks payrolls, incomes, sales and production - the measures used by the National Bureau of Economic Research to determine the beginning and end of recessions.