By Maria Martinez


An economic index that measures U.S. business cycles rose in December, suggesting the economy continued to grow, according to data from The Conference Board released Friday.

The Leading Economic index increased 0.8% to 120.8 in December compared with the previous month, in line with the forecast from economists polled by The Wall Street Journal.

The index rose by 0.7% in November, so December's data signals that economic growth gathered momentum despite growing Covid-19 cases.

The rising trajectory of the index suggests that the economy will continue to expand well into the spring, said Ataman Ozyildirim, senior director of economic research at The Conference Board.

The Conference Board Leading Economic Index is based on 10 components, among them initial claims for unemployment insurance, manufacturers' new orders, building permits of new private housing units, stock prices and consumers expectations. It is intended to signal swings in the business cycle and to smooth out some of the volatility of individual indicators.

The Coincident Economic Index, a measure of current economic activity, increased 0.2% in December to 107.4.

"For the first quarter, headwinds from the Omicron variant, labor shortages and inflationary pressures, as well as the Federal Reserve's expected interest rate hikes, may moderate economic growth," Mr. Ozyildirim said.

The Lagging Economic Index rose 0.1% to 109.4, the report said.

The Conference Board forecasts GDP growth for the first quarter 2022 to slow to 2.2%.

Still, for 2022, the Conference Board forecasts the U.S. economy will expand by a robust 3.5%, well above the pre-pandemic trend growth.


Write to Maria Martinez at maria.martinez@wsj.com


(END) Dow Jones Newswires

01-21-22 1035ET