An index of key data released by The Conference Board shows the U.S. economy expanded in March, following more tepid gains at the start of 2014. Leading indicators increased 0.8% last month – the best gain since November. In January and February, indicators were up 0.2% and 0.5%, respectively.
“After a winter pause, the leading indicators are gaining momentum and economic growth is gaining traction,” said Ataman Ozyildirim, an economist at The Conference Board. “While the improvements were broad-based, labor market indicators and the interest rate spread largely drove the March increase, offsetting the negative contribution from building permits. And, for the first time in many months, the consumer outlook is much less negative.”
There are 10 components to The Conference Board’s leading indicators index, including manufacturers' new orders, average weekly initial claims for unemployment insurance, building permits, and selected stock prices. This most recent data bodes well for “accelerated growth” at least through the second quarter, the research firm said.
Separately, the latest quarterly survey by the National Association for Business Economics (NABE) shows about 80% of economists anticipate real GDP growth to be above 2% in 2014. Approximately 72% of those surveyed are predicting growth to be between 2% and 3%. No NABE survey respondents expect the economy to contract this year. Forecasters also believe the U.S. unemployment rate will decrease to between 5% and 6% over the next three years, with wage growth staying modest, rising less than 3%, during the same time span.