The government said Friday its chief economic forecasting gauge posted a big 1.1 percent increase in February, reversing course after eight months in which it had been flashing recession warnings.
The Commerce Department said the gain in its Index of Leading Economic Indicators was the first since June and the biggest one-month advance in almost three years.Analysts said the collection of forward-looking economic indicators was providing an unmistakable signal that better days are ahead for the U.S. economy.
In other good economic news, the government said sales of new single-family homes posted their biggest gain in February in almost five years. Analysts said the 16.2 percent advance provided fresh evidence that the housing industry's long slump is drawing to a close.
Many economists said the February upturn in the leading index was not inconsistent with an end of the recession sometime in the April-June quarter. That is the time frame when the Bush administration is forecasting the country's first recession in eight years will come to an end.
Three-fourths of February's gain came from just two sources - the rise in stock market prices during the month and a gain in consumer sentiment.
Other sources of strength in February were an increase in homebuilding permits, faster growth in the nation's money supply, an increase in orders for consumer goods and a larger backlog of unfilled orders held by manufacturers.