The government's chief economic forecasting gauge rose 0.5 percent in March, its second consecutive monthly advance, the Commerce Department said Wednesday.
The increase in the March Index of Leading Economic Indicators followed a revised 1.2 percent gain in February, stronger than the 1.1 percent estimate announced earlier.The February advance had ended a string of six losses stretching back to July, when the index was flat.
That's when the current recession started, according to the National Bureau of Economic Research, the recognized arbiter of when recessions begin and end.
The index is designed to forecast economic activity six to nine months in advance.
The Bush administration and some private analysts contend the recession will end during the current quarter. Others predict it will last until the second half of the year.
In any case, few economists expect a smooth transition.
"We're going to be plagued with mixed signals for the next several months," suggested Laurence H. Meyer, head of a St. Louis economic forecasting firm.
For instance, the biggest source of strength in the March indicators came from an index measuring consumer confidence in the month following the gulf war. But surveys released on Tuesday showed consumer confidence fell back in April.
Another positive contributor to the March index was an increase in stock prices. But while the Dow Jones indistrial average continued to rise in early April and closed above the 3,000 mark for the first time, it fell below the 2,900 level this week.
Other sources of strength included an increase in the money supply and building permits, often a barometer of future construction activity. Many economists believe the housing industry will lead the economy out of the recession.
But seven of the 11 forward-looking indicators made negative contributions, including a drop in factory orders for consumer goods, an increase in weekly unemployment claims and a shorter workweek.
Other negatives were declining orders for new plants and equipment, fewer unfilled factory orders, a decline in prices of raw materials suggesting slack demand and faster delivery times indicating the weakness in orders.