The government's chief economic forecasting gauge inched up 0.1 percent in December, its first gain in six months, the Commerce Department said Wednesday in a report suggesting the recession may ease in several months.
The increase in the Index of Leading Economic Indicators followed revised drops of 1.1 percent in November and 1.2 percent in October.The November decline was first reported as 1.2 percent and October's was 1.3 percent, which would have been the worst showing since a 1.4 percent plunge in November 1987. Even July's index was improved, making it unchanged from June rather than declining 0.1 percent as first reported.
The index is designed to forecast economic activity six to nine months in advance.
Most economists, including those in the Bush adminstration and on Capitol Hill, have said the recession will be shorter and milder than the average downturn since World War II, ending sometime during the second quarter.
President Bush said in his State of the Union message Tuesday night that while "the largest peacetime economic expansion in history has been temporarily interrupted . . . we will get this recession behind us, and return to growth - soon."
But many economists are hedging their bets on the outcome of the Persian Gulf crisis.
Six of the 11 forward-looking components propped up the index in December, including higher stock prices, a longer average workweek and orders for new plants and equipment.
Other positive contributors were an improvement in an index measuring consumer confidence, a decline in initial unemployment claims and an increase in unfilled orders at factories.
Negative contributors were fewer factory orders for consumer goods, a decline in building permits, faster business delivery times, a drop in prices of raw materials and a decline in the money supply.