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Published: Friday, 2/20/2009

Index shows unexpected January rise


NEW YORK - A private-sector measure of economic activity jumped unexpectedly in January for a second straight monthly increase, due mainly to federal efforts to expand the money supply.

The New York-based Conference Board said yesterday that its January index of leading economic indicators rose 0.4 percent. Economists surveyed by Thomson Reuters expected no change in the index, which forecasts economic activity for the next three to six months based on 10 economic components, including stock prices, building permits, and initial claims for unemployment benefits.

The Conference Board said the single biggest boost to the index was the real money supply. The government's effort to address the credit crisis has put more money in circulation.

Five of the 10 factors that make up the index increased in January, including the interest rate spread, an index of consumer expectations, and manufacturing orders for nondefense and consumer goods.

Last month's gain compared with a 0.2 percent increase in December and a drop of 0.7 percent in November. Those measures were revised down from prior estimates.

Conference Board economist Ken Goldstein says the "intensity" of the recession could begin to ease in the next few months.

"The second half of 2009 may see a period of anemic growth," Mr. Goldstein said in a statement, but "robust" growth would not return until well into 2010.

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