A closely watched index of future U.S. economic activity rose for a fifth consecutive month in August to an 18-month high, a private research organization reported Monday, the latest sign the recession has ended. The Conference Board reported that its index of leading economic indicators, which is designed to forecast economic trends in the next six months, rose 0.6 percent last month to 102.5, the highest level since January 2008. The index rose 0.9 percent in July. “This suggests that the recession is bottoming out. These numbers are consistent with the view that after a severe downturn, a recovery is very near. But the intensity and pattern of that recovery is more uncertain,” said Conference Board economist Ken Goldstein. Five of the index's 10 indicators improved in August, including supplier deliveries, the interest-rate spread, stock prices, building permits, and consumer expectations. Two indicators—manufacturers' new orders for consumer goods and average weekly manufacturing hours—were steady, and three indicators remained weak, including money supply, weekly jobless claims, and manufacturers' new orders for non-defense capital goods. The leading indicators index jumped 4.4 percent—an 8.9 percent annual rate—in the six months through August. That was the fastest six-month growth rate since March 2004. The increase in the six months through July was 3.3 percent. The Conference Board's coincident index, which measures current economic activity, was flat at 99.8 in August, while the lagging index, which measures past economic performance, fell 0.1 percent to 110.2. Monday's report supports many analysts' projections that the U.S. economy started growing again in the current July-September quarter and will continue to gain in the fourth quarter.
