Econ taking off
Stocks soar on 3rd month of growth signs
SIGNS ARE pointing to the economy kicking into a higher gear in the second half.
Positive data on jobs, inflation, housing and consumer spending showed the U.S. economy is moving past its weak first quarter and will continue to expand in 2015.
The upbeat outlook, culled from a handful of reports released Thursday, helped push major stock indexes up by more than 1%, with the Nasdaq closing at a new record level of 5,133 and the Dow Jones surging 180 points to 18,116 after flirting all day with a 200-point gain. The S&P 500 rose for the third straight day.
Stocks were already starting to soar in early trading after the Federal Reserve on Wednesday said the economy is looking strong enough to support an interest rate increase later this year, and indicated the likelihood of just one rate hike in 2015 and slightly lower rates over the next two years.
The Conference Board on Thursday said its leading economic index — which takes into account such components as jobless claims, factory orders, construction permits and stock prices — rose a better-than-expected 0.7% in May following a 0.7% increase in April and a 0.4% rise in March.
The combined April and May increases were the best back-toback rise since mid-2014.
Economic indicators “increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half,” Ataman Ozyildirim, the Conference Board’s director of business cycles and growth research, said in a statement.
Economists are expecting growth to accelerate after the economy contracted 0.7% in the second quarter.
The Labor Department’s weekly report on unemployment claims showed the labor market continued to gain momentum, with first-time applications for jobless benefits dropping last week by 12,000 to a near 15-year low of 267,000.
Meanwhile, the cost of living in the U.S., minus food and gas, increased less than expected last month. Socalled core prices rose just 0.1%, which could push the Fed to delay a rate hike until inflation rises at a pace signifying strong growth.