Leading Indicators Rebound in May

NEW YORK (TheStreet) -- A positive turn in the leading indicators index is offering a glimmer of hope for the ailing economy.

The Conference Board reported that its leading indicator index ticked up 0.8% in May, after a revised 0.4% dip in April. Economists had predicted a rise of 0.2%.

A rebound in the index, which takes into consideration ten indicators in total, suggests that the latter half of the year might be a story of growth. Eight of the ten indicators were higher. Many economists, including Federal Reserve Chairman Ben Bernanke, have said that they expect a pickup in GDP in the next few months as employment improves and the global economy recovers from supply disruptions in Japan.

"Modest economic growth is being buffeted by some strong headwinds, including high gas and food prices and a soft housing market," said economist Ken Goldstein in the Conference Board report. "The economy will likely continue to grow through the summer and fall, however it will be choppy."

Job numbers had been a bit better than expected on Thursday, but negative manufacturing numbers coming out of New York and Philadelphia had weighed down on the markets nonetheless.

A high number of jobless claims, declining building permits and orders for consumer goods dragged down April's indicator index. Buoying the composite index were stock prices, money supply, consumer expectations, the 10-year note, and a rise in the federal funds rate. Four of the ten indicators tracked by the Conference Board went up while six declined.

The Dow Jones Industrial Average is currently up 87 points, or 0.7%, at 12,048. Interest rates moved up slightly on the news. The ten-year note was losing 4/32, pushing the yield to 2.945%.

-- Written by Chao Deng in New York.

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