Leading indicators rise 0.3 pct in January

(AP) — A forecast of future economic activity grew at a slower pace in January, but still suggests that the economy will continue to grow through spring.

The index of leading economic indicators rose 0.3 percent last month, according to Thursday's report from the Conference Board, a private research group. That's weaker than a 1.2 percent rise in December and a 1.1 percent rise in November, and the smallest of the index's 10 straight monthly gains.

It also was short of the 0.5 percent growth that economists polled by Thomson Reuters expected.

Still, the upwards tilt in the forecast shows that the "economy continues to forge ahead," said Jennifer Lee of BMO Capital Markets.

The leading indicators gauge is designed to forecast economic activity in the next three to six months.

The index has risen for nearly a year thanks to a recovery in the manufacturing sector and the rally in the stock market.

Some economists have been worrying that growth in the economy will stagnate this year, however, as government support programs wind down and unemployment remains high.

Five of the 10 components in the index showed improvement in January: the interest rate spread, supplier deliveries to companies, average weekly hours worked in the manufacturing sector, stock prices and consumer expectations.

The interest rate spread, which is the difference between the cost of borrowing money for 10 years and borrowing overnight, widened. That can signal that investors expect inflation to increase or that they expect economic activity to pick up.

Longer work hours are also a signal that factories are seeing more orders and boosting production.

The money supply, an increase in weekly claims for unemployment aid, fewer building permits for future home construction and manufacturers' new orders for capital goods weighed on the measure.

Manufacturers' new orders for consumer goods were steady.