More good news, and in this market environment we’ll take it. The Conference Board announced on Monday that the U.S. leading index increased for the second straight month, up 0.1 percent. News sent stocks higher. The index is used to gauge market cycle volatility. Stock prices, the interest rate spread and housing permits were credited for the news, more than offsetting the sharp declines in average weekly hours and consumer expectations. To the numbers:

  • In April, the six-month rate of decline in the leading index slowed to -1.2 percent (a -2.3 percent annual rate), from – 2.4 percent (a -4.7 percent annual rate) from July 2007 to January 2008. In addition, the weaknesses among the leading indicators have become somewhat less widespread in the last two months.
  • After declining steadily since the middle of 2007, the leading index appears to have stabilized, increasing slightly in March and April. Meanwhile, the coincident index declined slightly since October 2007 and the weaknesses among its components have been widespread in recent months. During the first quarter, real GDP expanded at a 0.6 percent annual rate, the same growth rate that prevailed in the fourth quarter of 2007. The current behavior of the composite indexes so far still suggests that economic activity is likely to remain weak in the near term.

Though it’s early, the wind is at our backs. Let’s hope it stays so.