WASHINGTON – A measure of the U.S. economy’s health over the next six months increased in February from January, a sign that growth could be improving.
The Conference Board said Thursday that its index of leading indicators rose 0.5 percent in February to 94.8. That followed an equal gain in January, which was revised higher. The gauge is designed to anticipate economic conditions three to six months out.
The increase was also more broad-based, with eight of its 10 components rising. That compared with only five in January and six in December.
A gain in housing permits, a longer manufacturing workweek and rising stock prices were among the elements that drove the index higher. Lower orders for large manufactured goods and lower consumer outlook for business conditions limited the gain.
The economy may be developing some resilience against headwinds from federal spending cuts, said Ataman Ozyildrim, an economist at the Conference Board.
A steady recovery in housing and rising job gains could be offsetting the cuts, he added. Automatic government spending cuts of $85 billion kicked in March 1, though their impact may not be felt until April and May when layoffs at government agencies and contractors will likely start.
The index is derived from data that for the most part have already been reported individually.
Other reports issued Thursday also pointed to steady improvement.
The number of people seeking U.S. unemployment aid barely changed last week, while the average over the past month fell to a fresh five-year low. The decline in layoffs is helping strengthen the job market.
Weekly unemployment benefit applications rose just 2,000 to a seasonally adjusted 336,000, the Labor Department said Thursday.
Over the past four weeks, the average number of applications has dropped by 7,500 to 339,750. That’s the lowest since February 2008, just three months into the recession.
Economists pay close attention to the four-week average of applications because it can smooth out week to week fluctuations. The steady decline in unemployment claims signals that companies are laying off fewer workers. That suggests many aren’t worried about economic conditions in the near future.
The four-week average has fallen nearly 15 percent since November. The trend has coincided with acceleration in the job market.
Improvement in labor market conditions continues, said Julia Coronado, an economist at BNP Paribas.
Applications spiked in the recession as companies slashed millions of workers from their payrolls. The number of people seeking benefits averaged only 320,000 a week in 2007, before the recession began. That figure soared to 418,000 in 2008 and 574,000 in 2009.
It’s taken more than three years to unwind those increases.
In another positive report, U.S. sales of previously occupied homes rose in February to their fastest pace in more than three years, and more people put their homes on the market. The increases suggest a growing number of Americans believe the housing recovery will strengthen.
The National Association of Realtors said Thursday that sales increased 0.8 percent in February from January to a seasonally adjusted annual rate of 4.98 million. That was the fastest sales pace since November 2009, when a temporary homebuyer tax credit had boosted sales. The February sales pace was also 10.2 percent higher than the same month a year ago.
Steady hiring and near record-low mortgage rates have helped boost sales and prices in most markets.
The Realtors’ group says the median price for a home sold in February was $173,600. That’s up 11.6 percent from a year ago.