March Numbers Are Looking Good: Conference Board

March brought some long-awaited upbeat economic news, with the index of leading economic indicators rising 1.4 percent.  According to MarketWatch, the milestone represents 12 consecutive monthly gains and outperformed February’s 0.4 percent increase. Ken Goldstein, a Conference Board economist, said that “Improvement in employment and income will be the key factors in whether consumers push the recovery on a stronger path.”

Although seven of the 10 leading indicators were positive in March, Ian Shepherdson, chief U.S. economist with High Frequency Economics, is not particularly optimistic.  “We look for a much smaller increase in the index in April,” he said.  “The index, in our view, fails to reflect the ongoing disaster in the small business sector, so it is very likely overstating growth substantially.  Taken at face value over recent months, it suggests the economy is booming.  It isn’t, and it isn’t about to start, either.”

The month’s most positive contributions came from interest rate spreads and average weekly manufacturing hours.  Negative impacts were the real money supply and manufacturers’ new orders for capital goods not related to the defense industry.  The coincident index – a measure of the economy as it is at a given time – climbed 0.1 percent in March.  The National Bureau of Economic Research uses these indicators to determine if the economy is in a recession.

The Department of Labor reported that the U.S. economy created 162,000 jobs in March, with the largest positive contribution coming from non-farm employment.  This is the largest seasonally adjusted increase in three years.  Temporary U.S. Census hiring and a recovery from bad winter weather boosted the employment numbers.  “Payrolls employment made its first substantial contribution to the coincident economic index, suggesting a recovery that is beginning to gain traction,” according to Ataman Ozyildirim, a Conference Board economist.