WASHINGTON - A measure of the U.S. economy’s health rose in March for the third consecutive month, a sign of stronger growth after harsh winter weather caused the economy’s pace to slow.
The Conference Board said Monday that its index of leading indicators increased 0.8 percent in March after a 0.5 percent rise in February and modest 0.2 percent gain in January. It was the best showing since a 0.9 percent gain in November.
Both hiring and consumer outlooks have improved, which along with interest rates fueled much of the index’s improvement. That offset a negative contribution from building permits. The index looks at a series of different indicators to spot peaks and troughs in economic growth.
Conference Board economists said the gains last month point to “accelerated growth for the remainder of the spring and the summer,” although it remains to be seen whether employers continue to hire at their March and February pace of almost 200,000 workers a month.
“The economy is rebounding from widespread inclement weather, and the strengthening in the labor market is beginning to have a positive impact on growth,” said Ken Goldstein, an economist at The Conference Board. “Overall, this is an optimistic report.”
Many economists expect the overall growth rate in the January-March quarter will dip below 2 percent because of the weather disruptions, but they are forecasting a rebound in coming quarters to growth of about 3 percent.
“The economy is picking up momentum after a slow start and a weak first quarter,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc., in an interview before the report. “There’s definitely more going up than down.”
The labor market has shown signs of shaking off its winter slump, with employers adding 192,000 workers to payrolls last month after a revised 197,000 gain in February that was larger than initially estimated, according to Labor Department data.
A separate report last week showed initial unemployment claims are hovering near the lowest level in almost seven years, increasing by 2,000 to 304,000 in the week ended April 12.
The total number of people receiving benefits fell by 11,000 to 2.74 million in the week ended April 5, the fewest since December 2007, the Labor Department’s report showed.
Momentum may be fading in other parts of the economy. The housing market recovery has been challenged by slightly higher interest rates, slow wage growth and tight credit, which have put home ownership out of reach for some would-be buyers. Despite an increase that began about a year ago, mortgage rates remain near historic lows.
Housing starts climbed 2.8 percent to a less-than-forecast 946,000 annualized rate after February’s 920,000 pace, a Commerce Department report showed last week. Building permits, which are part of the leading index, declined 2.4 percent to a 990,000 annualized pace.
Information for this article was contributed by Josh Boak of The Associated Press and Victoria Stilwell of Bloomberg News.
Business, Pages 22 on 04/22/2014