NEW YORK -- A key measure of future economic activity rose 0.2 percent in December to its highest level ever, helped by relatively strong consumer spending and growing indications the job market is improving.
The report released Thursday coincided with government data suggesting that the employment picture may be improving.
The increase in the Conference Board's Composite Index of Leading Economic Indicators, calculated since 1996, matched analysts' forecasts, and brought the gauge to 114.3, surpassing the previous high of 114.1 in November.
"All indicators point to continued economic growth," said Ken Goldstein, economist for the private industry group. "More job gains than in November and December are in store for the early months of 2004. Consumer spending growth is relatively strong, and the strong recovery in business investment in equipment and software remains on track."
The index of leading indicators forecasts trends in the economy in the next three to six months. The December figure followed a revised increase of 0.2 percent in November and a 0.5 percent rise in October.
In December, seven of the 10 factors that make up the index increased, including stock prices, building permits and average weekly initial claims for unemployment insurance.
"These numbers don't usually give you an indication of magnitude of growth, but they do show direction," said Alexander Paris, economist for Chicago-based Barrington Research. "They're really confirming that the economy is going to continue to grow all through 2004."
Also Thursday, the Labor Department reported that for the second straight week, fewer people filed new claims to collect unemployment benefits - a possible indication that American businesses are growing more confident about the sustainability of an economic recovery.
The Labor Department data showed that for the work week ending Jan. 17, new applications filed for unemployment insurance dipped by a seasonally adjusted 1,000 to 341,000, the lowest level since the end of December.
The more stable four-week moving average of claims dropped by 3,250 to 344,500, the lowest level since January 2001.
With the four-week moving average of jobless claims running below 400,000 for 16 straight weeks, economists are growing more confident that the fragile job market is turning the corner.
"This really shows that the labor situation has been improving slowly but steadily since last spring," Paris said.