An index designed to predict the future health of the U.S. economy posted another solid increase in June, The Associated Press reports, providing further hope that the economy will gain momentum in the second half of this year.
The Conference Board announced this morning that its index of leading indicators rose 0.6% in June following healthy gains of 0.8% in May and 0.6% in April.
Conference Board economists said the string of solid increases point to continued economic strength for the rest of this year. The June advance was supported by favorable interest rates and strength in applications for home building permits.
Jesse Hurwitz, an economist at Barclays, says that the solid advance in the index was a reflection of a broad pickup in economic data in recent months which will be reflected in stronger economic growth.
Barclays is forecasting that the overall economy expanded at an annual rate of 3% in the second quarter, a sizable increase from the 0.2% contraction in activity in the first quarter. Economists believe the economy will keep growing at rates near 3% in the second half of the year.
The leading index is composed of 10-forward pointing indicators. Six of the 10 indicators advanced in June while three were unchanged and one indicator declined. The weakness came from a drop in stock prices.
