Newspaper article THE JOURNAL RECORD

Leading Indicators Soar 0.9% in February / Biggest Jump since June

Newspaper article THE JOURNAL RECORD

Leading Indicators Soar 0.9% in February / Biggest Jump since June

Article excerpt

WASHINGTON (AP) - The government's chief economic forecasting gauge climbed 0.9 percent in February, a sharp rebound following several months of weakness after the October stock market collapse, the Commerce Department reported Tuesday.

The gain in the Index of Leading Economic Indicators was the biggest increase since last June. It followed declines of 1.1 percent in January, 0.1 percent in October and 1.2 percent in November.

Only a 0.4 percent rise in December kept the index from posting consectuive declines for three or more months, the traditional signal of an impending recession.

But with the big February increase, analysts said they believe the leading index is accurately signaling that the economy slowed in the early part of 1988 but the country will avoid a recession this year.

The 0.9 percent February increase was led by a big jump in applications for building permits, which provided over half of the strength last month.

In all, five of the available nine indicators were positive forces on the index. After building permits, the biggest contributors were a drop in new unemployment claims, a rise in stock prices, an increase in the growth of the money supply and higher orders for consumer goods.

Four of the indicators held the index back. The biggest negative factor was a decline in the length of the average manufacturing workweek, followed by a decline in orders for plant and equipment, a change in raw materials prices and a speed-up in business delivery times, considered a negative because it is often a sign of dropping demand.

The various changes left the index at 190.6 percent of its 1967 base of 100.

The jump in the February index was one of a string of recent reports showing better-than-expected strength in the early part of 1988. …

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