The government index of leading economic indicators, used to determine future economic trends, showed its first increase in a year and its biggest jump in five years last month, the Commerce Department said. The index rose 2.5 percent in June after a sharp 2.3 percent drop in May and a record 3.9 percent decline in April. It was the first increase since June 1979 and the largest since a 3.2 percent rise in June 1975, when the nation was trying to pull out of its last recession.
This suggests recovery from the recession may begin in the next few months. But economists warn the index is subject to large revisions and has not been sharply accurate in determining the size or length of recessions and recoveries.
Fewer workers being laid off in June contributed the most to the overall increase. But stock prices, the money supply, liquid assets, orders for plant and equipment, building permits, and new orders for consumer goods also showed improvement.
Wednesday's report followed one Tuesday that the United States had cut its trade deficit to $2.28 billion in June. The June deficit was signifi cantly smaller than May's, representing the second-best trade month the nation has had this year.