U.S. Leading Economic Index Rises in January -- The Conference Board

An economic index that measures U.S. business cycles increased in January for the ninth consecutive month, data from The Conference Board showed Monday.

The Leading Economic index was 110.3 in January, up 0.5% compared with December. The rise is broadly in line with expectations from economists polled by The Wall Street Journal, who forecast the indicator to increase 0.4%.

In December, the index rose by an upwardly revised 0.4% compared with November.

January marks the ninth straight monthly rise for the index, which rebounded strongly in May and June after the economy reopened but slowed the following months. January's slight acceleration compared with December suggests an uptick in economic activity.

"While the pace of increase in the U.S. LEI has slowed since mid-2020, January's gains were broad-based and suggest economic growth should improve gradually over the first half of 2021," Conference Board Senior Director of Economic Research Ataman Ozyildirim said.

The Conference Board Leading Economic Index is based on 10 components, among them initial claims for unemployment insurance, manufacturers' new orders, building permits of new private housing units, stock prices and consumers expectations. It is intended to signal swings in the business cycle and to smooth out some of the volatility of individual indicators.

The Conference Board expects the U.S. economy to expand by 4.4% in 2021, after a 3.5% contraction in 2020, Mr. Ozyildirim said.

"As the vaccination campaign against Covid-19 accelerates, labor markets and overall growth are likely to continue improving through the rest of this year as well," he said.

The Coincident Economic Index rose 0.2% in January to 103.3, while the Lagging Economic Index declined 0.6% to 106.2, data from The Conference Board showed.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

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  02-22-21 1029ET
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