U.S. Economic Recovery Looks to Be Gaining Strength

The most bankable of monthly U.S. economic reports in terms of the scope of what it tell us is the Index of Leading Economic Indicators -- and you should take heart in what the latest reading shows.

The index rose for a sixth straight month in September by a higher-than-expected 1 percent, sparking its biggest six-month rise since 1983, when the U.S. was emerging from its last grave recession, the Conference Board reported today. The reading is more than just confirmation a recovery is in full swing; it's saying growth will be robust into next year.

"The recovery is here and it's going to get a little stronger too," Jonathan Basile, a Credit Suisse economist who accurately forecast the index's gain told Bloomberg News. "There are headwinds like there are in every recovery, but the leading index is telling you there won't be a double dip," or relapse into recession.

Investors worldwide rush to trade off many U.S. economic reports, be it unemployment, housing starts, business inventory levels or personal income and spending. The index's value is it's a compendium of 10 different gauges - from the length of the average work-week to the money supply's growth or contraction -- and it forecasts economic activity three to six months ahead.

Eight of the 10 indicators rose in September's report, led by the spread between long- and short-term interest rates, an improvement in consumer expectations, lower unemployment claims and a rise in the stock market.

That put the index at its highest level in two years and firmly established the strength of the recovery. Four straight monthly gains or declines in the index are a historically reliable forecaster of a turn in the economy, and with September's reading, the index is up for a full six consecutive months.

A Conference Board economist cautioned the "intensity of the recovery will depend on how much, and how soon, demand picks up." Still, the good news is the index suggests you're much more likely to get a call from a job recruiter in the next six months than a layoff notice from your employer.