The government's main forecasting gauge of future economic activity posted a 0.3 percent rise in November, signaling to analysts that the recovery is in no current danger of stalling out.
The Commerce Department report Thursday said that last month's gain in the Index of Leading Indicators was the strongest since a 0.5 percent rise in August. It followed a 0.1 percent drop in October, which had been the first decline in the index in 15 months.In a second report Thursday, the Labor Department said that the number of Americans filing first-time claims for unemployment benefits fell by 3,000 last week, more than erasing a gain of 2,000 the previous week. The claims figure has remained in the low 300,000 range in recent months, reflecting basic strength in job markets, analysts said.
Cynthia Latta, an economist at DRI-McGraw Hill Inc., said the rise in the leading index, while slightly higher than predicted, was still pointing to an economic slowdown next year.
"The gains in the index over the past six months have been lower than the gains in the first part of 1994, indicating the economy will slow next year, which is what we want to happen," she said.
The report noted that the compilation of forward pointing business barometers was equally split, with five components showing strength and five subtracting from the overall total.
The biggest source of strength in the leading index came from a rise in orders for new plant and equipment, which posted its best gain in a year.
Other components showing strength were gains in factory orders for consumer goods, a rise in unfilled orders for durble goods, a decline for the month in the average weekly unemployment claims and a rise in sensitive material prices.
The biggest negative factor was a slowdown in growth of the money supply followed by a fall in stock prices, a drop in building permits, changes in business deliveries and a drop in consumer expectations.
A variety of statistics have shown that 1994 was ending on a strong note with retail sales up and the jobless rate dipping to a four-year low of 5.6 percent.