Despite rising gas prices and a still struggling housing market, leading indicators improved in February. The Conference Board's Leading Economic Index increased by 0.8% last month. It has grown relatively steeply since mid-2010. Although this index implies that the U.S. economy should continue to expand at a moderate pace, it doesn't take into account a big negative shock from March: Japan's natural disaster.
The chart from the Conference Board provides a pretty clear picture of what's been going on with the LEI recently:
You can see the very steep growth in the LEI (blue line) from mid-2008 through late-2009. Then there was a slowdown early last year. The growth then resumed at a similar clip as before in the second part of 2010.
Of the 10 indicators that make up the LEI, only two worsened in February: new housing permits and new orders for manufacturers. As the home building market continues to struggle, it remains a drag on the index. Its brought down the LEI by 0.22%. But the other weak indicator, new orders for manufacturers, barely ticked down -- by just 0.04%. While there isn't reason to fret over a decline that small, it would be more comforting to know that manufacturers' orders are growing instead.