The index of U.S. leading indicators rose more than anticipated in December, a sign the economy will keep growing through the first half of the year.
The Manhattan-based Conference Board's gauge of the outlook for the next three to six months climbed 1.1 percent, the most in three months, after increasing 1 percent in November. The gain exceeded the median forecast in a Bloomberg News survey for a 0.7 percent rise.
Fewer firings, rising stock prices and Federal Reserve efforts to keep interest rates low propelled the index, while growth in exports and inventories have spurred production. Sustained demand and faster economic growth will hinge on employment gains that have yet to materialize.
"The economic recovery still has momentum," said Tim Quinlan, an economist at Wells Fargo Securities Llc in Charlotte, N.C., who forecast the December gain. "Right now, the linchpin is confidence. Both businesses and consumers need to feel like it's a worthwhile thing to start spending money again."
Manufacturing in the Philadelphia area grew in January, corroborating figures last week showing expansion at factories in the New York region. Economists surveyed by Bloomberg projected the leading indicators index would increase 0.7 percent from a previously reported 0.9 percent gain in November, according to the median of 58 estimates.