Economy shows signs of life

The Conference Board Inc.'s index of leading indicators, a key gauge of the state of the economy, posted its second consecutive 0.1% increase last month in a sign that an economic rebound may be on the horizon. The index measures the economic outlook for the next six months. Despite the increase, six of the 10 leading indicators on the index fell in May. The negative factors were the interest rate spread, stock prices, manufacturers' new orders for consumer goods and materials, and manufacturers' new orders for non-defense capital goods. The positive factors included the index of consumer expectations, building permits, index of supplier deliveries and average weekly initial claims for unemployment insurance. “The data shows that economy may not get much worse,” said Ken Goldstein, a labor economist at the New York-based Conference Board. “You will probably see improvement in the late fourth quarter at [the] earliest.” Mr. Goldstein thinks that the housing market may have finally hit rock bottom, and it “doesn't appear that it will get any worse.” If crude oil were to hit $140 per barrel and a high demand for energy resulted in rolling blackouts over the summer, then the economy could swing downward, he said.