Leading Indicators in U.S. Rose in November for Third Month

The index of U.S. leading indicators rose in November for a third straight month, a sign the economy is gaining traction heading into 2015.

The Conference Board’s index, a gauge of the outlook for the next three to six months, increased 0.6 percent in November, matching the prior month’s gain, the New York-based group said today. The median forecast of 49 economists surveyed by Bloomberg called for a 0.5 percent advance.

Strengthening employment and a plunge in prices at the pump are bolstering the consumer spending that makes up almost 70 percent of the economy, helping shelter the expansion from slowing growth overseas. Federal Reserve policy makers said yesterday they would remain “patient” in increasing near-zero interest rates even as domestic demand firms.

“The biggest challenge has been, and remains, more income growth,” Ken Goldstein, an economist at the Conference Board, said in a statement. “However, with labor market conditions tightening, we are seeing the first signs of wage growth starting to pick up.”

Estimates in the Bloomberg survey ranged from gains of 0.1 percent to 0.8 percent. The October reading was initially reported as a 0.9 percent increase.

Other reports today showed consumer confidence climbed to a seven-year high last week and fewer Americans applied for unemployment insurance benefits.

Gaining Confidence

The Bloomberg Consumer Comfort Index climbed to 41.7 in the period ended Dec. 14, the highest reading since mid-November 2007, from 41.3 the week before. Monthly views on economic expectations rose to match a two-year high.

Jobless claims decreased by 6,000 to 289,000 in the week ended Dec. 13, the least since early November, according to figures from the Labor Department.

Eight of the 10 indicators in the Conference Board’s leading gauge contributed to the gain, propelled by a jump in stock prices, growing factory orders and the spread between short- and long-term interest rates.

The index of coincident indicators, a gauge of current economic activity, climbed 0.4 percent in November after a 0.2 percent increase the prior month.

The coincident index tracks payrolls, incomes, sales and production -- measures used by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions.

A measure of lagging indicators rose 0.3 percent after being little changed in October.

Hiring Accelerates

Job gains that remain on pace for their best performance since 1999 are helping spur demand. Employers added 321,000 to payrolls in November, raising the monthly average so far this year to 240,910. Last year, the U.S. economy gained an average 194,250 jobs per month.

A drop in fuel prices also is supporting consumer pocketbooks. The average cost of a gallon of regular gasoline was $2.48 as of Dec. 17, the lowest rate since October 2009, according to AAA, the biggest U.S. motoring group.

While income growth has been slower to rebound, recent data show signs of a pickup. Wages and salaries paid to civilian workers climbed 2.1 percent in the third quarter from the same time last year, the most since the first three months of 2009, Labor Department data showed last month.

The U.S. economic advances have allowed Fed policy makers to relax accommodation measures that were meant to stimulate growth since the last recession. Yesterday, the officials said they will be patient on the timing of the first interest-rate increase since 2006, replacing a pledge to keep borrowing costs near zero for a “considerable time,” and raised their assessment of the labor market.

The central bankers in October ended an unprecedented monthly asset purchase program that inflated the balance sheet to more than $4 trillion.

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