Economy Watch: Uptick Ahead for the Economy?

Is there an improvement on the horizon for the U.S. economy?

Is there an improvement on the horizon for the U.S. economy—something that justifies the Federal Reserve’s seemingly optimism about the economy, and its willingness (perhaps) to raise interest rates in June? A couple of reports released on Thursday help make the case that the economy is emerging from its early-2016 sloth to a more active rest of the year, though the data is hardly all in.

For one, the Conference Board reported that its Leading Economic Index (LEI) for the U.S. increased 0.6 percent in April to 123.9 (2010 = 100). That followed no change in March, and a 0.1 percent increase in February, or virtually no rise in the metric for two months.

“The U.S. LEI picked up sharply in April, with all components except consumer expectations contributing to the rebound from an essentially flat first quarter,” noted the Conference Board’s Ataman Ozyildirim. “Despite a slow start in 2016, labor market and financial indicators, and housing permits all point to a moderate growth trend continuing in 2016.”

Also on Thursday, the Federal Reserve Bank of Chicago reported that its National Activity Index (CFNAI) rose to +0.10 in April from -0.55 in March. The improvement was led by production-related indicators. The index is comprised of 85 individual indicators in four major categories, including production but also employment, personal consumption, and sales.



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