A gauge of future U.S. economic activity in April rose to its highest level in nearly five years as firming housing and labor market conditions offset weakness in manufacturing, suggesting an anticipated growth slowdown would be temporary.
The Conference Board said on Friday that its Leading Economic Index increased 0.6 percent to 95.0 last month, the highest level since June 2008. The index had slipped 0.2 percent in March.
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Economists polled by Reuters had expected the index to rise only 0.2 percent in April.
Economic activity is expected to slow in the second quarter as the effects of higher taxes and deep government spending cuts kick in. However, housing and employment are showing some resilience, while manufacturing is showing some strain.
"The biggest positive factor is the potential for improvement in the recovering housing and labor markets," Ken Goldstein, an economist at the Conference Board, said in a statement. "The biggest unknown is the resiliency in confidence, both consumer and business."
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)