A speed limit sign is seen next to a city sign for Economy, Indiana, U.S. November 10, 2020. REUTERS Timothy Aeppel File Photo
WASHINGTON, January 21, Reuters -- A gauge of future US economic activity increased solidly in December, suggesting the expansion would continue despite challenges from the COVID 19 pandemic and anticipated interest rate increases from the Federal Reserve to tame high inflation.
The Conference Board said on Friday its Leading Economic Index rose 0.8% after advancing 0.7% in November. The increase was in line with economists' expectations last month.
The U.S. LEI ended 2021 on a rising trajectory, suggesting the economy will expand well into the spring, said Ataman Ozyildirim, senior director of economic research at the Conference Board in Washington.
For the first quarter, labor shortages and inflationary pressures, as well as the Fed's expected interest rate hikes, may moderate economic growth. The Conference Board estimated that gross domestic product growth would slow to a 2.2% annualized rate in the first quarter. It expects to see growth of 3.5% this year.
The government is expected to publish its fourth quarter GDP next week.