WASHINGTON (Reuters) - The U.S. economy is gathering steam as the year draws to a close, boosting optimism about prospects in 2011, according to measures published by two separate economic research firms on Friday.
The Conference Board’s measure of leading economic indicators jumped 1.1 percent in November, the biggest rise since March and the fifth straight monthly gain.
Separately, the Economic Cycle Research Institute said its gauge of future growth rose to its highest level since May.
It was the latest evidence of steady, if erratic, improvement in the economy’s prospects after a summer lull. Retail sales in particular have been surprisingly strong, raising hopes for consumer spending.
“The U.S. economy is showing some sparks of life in late 2010,” said Ken Goldstein, an economist at The Conference Board. “The indicators point to a mild pickup after a slow winter. Looking further out, possible clouds on the medium term horizon include weakness in housing and employment.”
For the moment, optimism has also been boosted by the passage in the U.S. Congress of President Barack Obama’s deal with Republicans to extend Bush-era tax cuts, though the measure also raises concerns about the budget deficit.
Over objections from many of Obama’s fellow Democrats, the House of Representatives, on a 277-148 vote, passed the $858 billion package of renewed tax cuts and extended jobless benefits late on Thursday.
U.S. gross domestic product grew at a 2.5 percent annual rate in the third quarter, but that was not enough to bring down the jobless rate, which rose to 9.8 percent in November.
Still, the rosier outlook from key indicators offered a bright spot.
“The surge in November is consistent with the message of accelerated growth as seen from other indicators. There is some more traction than what we saw last spring, especially in the labor market, but there is still fragility,” said James O’Sullivan, chief economist at MF Global in New York.
Additional reporting by Richard Leong in New York; Editing by Neil Stempleman