In the strongest sign yet that the economy is reaching bottom, the index of leading indicators rose 1.0 percent in April – the first increase in seven months.
The unexpectedly strong jump – analysts had expected a 0.6 percent rise – was widespread, with seven of the index's 10 components pointing up, including stock prices and consumer expectations, the Conference Board reported Thursday.
While the leading indicators suggested an overall economic upturn in the next six to nine months, the Conference Board's index measuring current economic activity actually declined in April, by 0.2 percent.
"Taken together, the behavior of the composite economic indexes suggests that the contraction in economic activity will continue in the near term, but will likely become less severe in upcoming months," the Conference Board said in its release.
Although the leading indicators notched negligible one-month increases twice during this recession, last month's upturn is the strongest in more than three years.
"If you go back to 2001, 1991, or 1982, there usually is a big pop when you get close to the nadir of the recession," said Ken Goldstein, economist at The Conference Board, in an interview. There's "no guarantee here, but this could be that kind of big pop.... That possibility looks better right now than it did just two or three months ago."