Newspaper article THE JOURNAL RECORD

Rising Economic Indicators Signal Growing Economy

Newspaper article THE JOURNAL RECORD

Rising Economic Indicators Signal Growing Economy

Article excerpt

By Dave Skidmore

Associated Press

WASHINGTON _ The government's chief economic forecasting gauge in November flashed a growth signal for the first year of the Clinton administration.

The U.S. Commerce Department said Wednesday that its Index of Leading Economic Indicators, designed to predict economic activity six to nine months in advance, jumped 0.8 percent, the strongest gain in 10 months and the second increase in a row.

Three movements of the index in the same direction are considered a good, although far from foolproof, clue to future economic conditions.

"There's hope and optimism in the country that things are going to get better. What we have to do now is keep interest rates down and get growth going," said President-elect Clinton in a statement from Hilton Head Island, S.C.

Analysts said the latest signs of a reviving economy call into question whether Clinton still needs to follow through with proposals for stimulating the economy with a middle-class tax cut and public works spending.

Economist Allen Sinai of the Boston Co. said Clinton's "Delphic statement. . .just reflects the puzzle the administration faces."

"The message for the new year is that the economy is up and running," he said. "Given that the economy is up and running, do we need to give it a shot of adrenalin? The answer is, `Maybe not and if so probably very little."

In another report, the departments of Commerce and Housing and Urban Development said new home sales last month unexpectedly fell 8.3 percent, the worst drop in 10 months and the second in a row.

But analysts were quick to dismiss the number, pointing out that the government's initial report has undercounted sales every month for more than a year.

In fact, the departments said they were changing their methods, starting with the report coming out next month, in an attempt to correct the undercounting.

The November jump in the leading index, which was in the range anticipated by economists, followed a 0.5 percent advance in October. Before that, the index had declined during three of the previous four months. …

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