US leading index rises, jobless claims fall, Philly Fed up

There was more evidence of strength in the US economy yesterday.

The Conference Board announced yesterday that the US leading index increased 0.9 percent in June to 137.7. Based on revised data, this index remained unchanged in May and increased 0.2 percent in April. Seven of the ten indicators that make up the leading index increased in June. The Board remarked that the increase "is consistent with the economy continuing to expand moderately in the near term, but at a slower pace than in recent quarters".

Employment data was also good, with initial claims for state unemployment insurance falling an unexpectedly large 34,000 to 303,000 last week from a revised 337,000 the prior week, according to the Labor Department. This was the largest one-week decline since December 2002 and brought new claims to the lowest level since April. The four-week moving average fell to 318,000 from 321,250 in the prior week.

And the Federal Reserve Bank of Philadelphia's business outlook survey shows an upturn in the manufacturing sector, with the diffusion index of current activity increasing from -2.2 in June to 9.6 this month. Expectations for future growth, though, showed some deterioration this month, with the index for future activity falling from 30.6 in June to 15.3, its lowest reading since February 2001.