Ken Goldstein, economist for The Conference Board, said November's LEI data provides further evidence of what the latest manufacturing, services and retail sales data have indicated to date: The U.S. economy is strengthening, and a "mild pickup" is ahead.
"The U.S. economy is showing some sparks of life in late 2010," Goldstein said, in a statement. "Overall, the indicators point to a mild pickup after a slow winter. Looking further out, possible clouds on the medium-term horizon include weaknesses in housing and employment."
A Rough Gauge at Best
In November, nine of the 10 index components increased, up from six in October: supplier deliveries, interest rate spread, average weekly initial jobless claims (inverted), real money supply, stock prices, the index of consumer expectations, average weekly manufacturing hours, manufacturers' new orders for consumer goods and materials, and manufacturers' new orders for nondefense capital goods. Only one component declined: building permits.
The November report provides additional data points that support the economic bulls' analysis. Namely, that despite the end of 2009 fiscal stimulus package spending, several other key dimensions of the economy -- particularly manufacturing and export sales -- are strong enough to sustain the recovery. Retail sales, although not outstanding, also have been better than expected so far this fall.
Add the positive psychological impact of the now-passed tax-cut extension agreement, which President Obama is expected to sign Friday or Monday, and the picture is one of a U.S. economy with modest growth engines in place to increase demand and push GDP growth higher, at least for the first half of 2011.