A closely watched gauge of future U.S. economic activity rose in May by the largest amount in over five years, the latest sign that the recession is easing, a private research organization reported Thursday. The Conference Board said its index of leading economic indicators—designed to forecast activity in the next three to six months—rose 1.2 percent, the biggest gain since March 2004. Economic activity in the December-May period also rose 1.2 percent, the first time that six-month measure has grown since April 2007. “The recession is losing steam,” said Conference Board economist Ken Goldstein. “If these trends continue, expect a slow recovery beginning before the end of the year.” However, he said the job market would take longer to rebound. Seven of the index's 10 components improved in May, including money supply, building permits, consumer expectations, stock prices, and vendors' deliveries of supplies to companies. But employment factors—jobless claims and weekly manufacturing hours—slowed the idnex's advance, as did the level of manufacturers' orders for consumer goods. Many economists say the recession may be followed by a “jobless recovery,” as nervous employers remain reluctant to hire, even as their business improves. That would show “how deep a hole we're in,” Goldstein said. May's report, while it signals an end to the recession this year, shows that the country is likely to spend some time in a “relatively weak economic environment,” he said. The national unemployment rate, which rose to a 26-year high of 9.4 percent in May, is expected to surpass 10 percent by next year.
