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UPDATE 1-US leading index up in April, first rise since June

Published 05/21/2009, 10:34 AM
Updated 05/21/2009, 11:00 AM

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WASHINGTON, May 21 (Reuters) - A forward-looking measure of the U.S. economy in April posted its first rise since June 2008, a private research firm said on Thursday, suggesting a pickup in growth in the second half of 2009.

The index of leading indicators, which is supposed to forecast economic trends six to nine months ahead, rose 1 percent in April after a revised 0.2 percent fall the previous month, the New York-based Conference Board said.

"The leading indicators suggest that while the recession will continue in the near term, the declines will be less intense," said Ken Goldstein, a Conference Board economist.

"If the indicators continue on the current track, that point might be reached in the second half of the year," Goldstein said.

Wall Street economists had forecast a rise of 0.8 percent after an initial 0.3 percent March drop.

The Conference Board said seven out of 10 measures of economic activity that make up the leading index rose in April. It was the first time in 1 1/2 years that measures showing strength exceeded those showing weakness.

The biggest positive contribution came from stock prices, but lower real money supply put a drag on the index.

The coincident index fell to 0.2 percent in April from a 0.6 percent fall in March, while the lagging index fell 0.5 percent in April from a matching 0.5 percent fall the previous month, the Conference Board said.

The index was the latest report to give mixed signals about the economy.

It fits reports that show the recession's worst phase may be over, including moderately stronger consumer confidence, unchanged consumer prices and industrial output declining at a slower pace.

But other data portray rising unemployment and weak retail sales that have kept cash-strapped consumers limiting their purchases to necessary items. (Reporting by Nancy Waitz; Editing by Kenneth Barry)

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