A gauge of future U.S. economic activity rose for a third straight month in February, suggesting the recovery is poised for further gains despite tighter fiscal policy in Washington.

The Conference Board said on Thursday that its Leading Economic Index increased 0.5% to 94.8 last month after advancing by an upwardly revised 0.5% in January.

Economists polled by Reuters had expected the index to rise 0.4% in February.

"The U.S. economy is growing slowly now, and with this reading increases hope that it may pick up some momentum in the second half of the year,'' Ken Goldstein, an economist at the Conference Board, said in a statement.

However, Goldstein cautioned that deep government budget cuts which went into effect at the beginning of March had yet to make their impact felt and were not yet reflected in the index.