For its fourth consecutive monthly gain, the index of leading economic indicators rose 0.6% in July, following an upwardly revised increase of 0.8% in June. However, July's gain was below the consensus forecast of 0.7% from economists polled by MarketWatch.
Despite good news in the data, "headwinds" remain for the U.S. economy, wrote Charmaine Buskas, senior economics strategist with TD Securities, in a research note.
"The labor market will remain a big hurdle going forward and might limit the extent to which the leading indicators can post significant upside," Buskas wrote.
Overall, six of the 10 indicators were positive contributors, three were negative, and one was steady. The interest rate spread was the largest positive contributor, while a reading on consumer expectations was the largest negative contributor.
As strength among indicators has widened in recent months, the six-month growth rate for the overall index hit 3%, its highest level since mid-2004, according to the Conference Board. In the prior six months, the index fell 2.8%.
The coincident index, which economists use to determine whether the economy is in a downturn, was unchanged in July, following eight months of declines. This index has been negative throughout the recession except for a gain in October, and a no-growth reading in April 2008. The lagging index fell 0.3%.
Elsewhere Thursday, the Labor Department reported that initial claims for state unemployment benefits rose by 15,000 to 576,000 in the week ending Aug. 15. That level was the highest since July 25.
