U.S. Economy: Leading Index, Factory Gauge Show Slump Easing

(Bloomberg – Shobhana Chandra and Bob Willis)

The index of U.S. leading economic indicators rose in May for a second consecutive month and a regional factory gauge climbed more than forecast in June, showing the worst recession in five decades may soon end. The leading index increased 1.2% after a 1.1% gain in April, the best back-to-back performance since November- December 2001, the New York-based Conference Board reported today. The Federal Reserve Bank of Philadelphia’s general economic index jumped to the highest level in nine months.

Stocks snapped a three-day losing streak and Treasury securities fell for a second day after the reports bolstered forecasts the world’s largest economy will begin to grow in the second half of 2009. A third report showed the number of Americans receiving jobless benefits dropped for the first time since January, indicating the job market is starting to thaw.

“The freefall-type environment we saw in the first quarter is definitely behind us,” said Zach Pandl, an economist at Nomura Securities International Inc. in New York. Manufacturing “is turning a corner” and “we will exit the recession at some point toward the end of this year.” Read the complete article here.