WASHINGTON (Reuters) – The measure of future US economic activity rose sharply in December, indicating that expansion will continue despite the challenges of the COVID-19 pandemic and the expected increase in interest rates by the Federal Reserve to curb high inflation.
The conference committee said on Friday that its leading economic index rose 0.8 percent last month after rising 0.7 percent in November. Last month’s increase was in line with economists’ expectations.
“The U.S. LEI ended 2021 with an upward trajectory, suggesting the economy will continue to expand until spring,” said Ataman Ozyildirim, senior director of economic research at the Conference Board in Washington.
“In the first quarter, uncomfortable Omicron winds, labor shortages and inflationary pressures, as well as expected increases in Fed interest rates, could dampen economic growth.”
The Conference Board estimated that gross domestic product growth would slow to 2.2% per year in the first quarter. It forecasts growth of 3.5% for this year.
The government is due to release a snapshot of GDP in the fourth quarter next week.
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