
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, March 29, 1991                   TAG: 9103290707
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

GROWTH REBOUND FORECAST/ ECONOMIC OUTLOOK SUBSTANTIALLY BRIGHTER

The government said today that its chief economic forecasting gauge posted a big 1.1 percent increase in February, reversing course after eight months in which it had been flashing recession warnings.

The Commerce Department said the gain in its Index of Leading Economic Indicators was the first since last June and the biggest one-month advance in almost three years.

Analysts said the collection of forward-looking economic indicators was providing an unmistakable signal that better days are ahead for the U.S. economy.

In other good economic news, the government said sales of new single-family homes posted their biggest gain in February in almost five years. Analysts said the 16.2 percent advance provided fresh evidence that the housing industry's long slump is drawing to a close. Many economists said the February upturn in the leading index was not inconsistent with an end of the recession sometime in the April-June quarter.

Three-fourths of February's gain came from just two sources - the rise in stock market prices during the month and a gain in consumer sentiment. While stock prices in March have given up some of their gains, surveys of consumer sentiment have gone even higher with the ending of the Persian Gulf War.

Other areas of strength in February were an increase in home building permits, faster growth in the nation's money supply, an increase in orders for consumer goods, a larger backlog of unfilled orders held by manufacturers and changes in the price of sensitive materials.

The faster growth for the nation's money supply reflected the aggressive credit-easing moves begun in late October by the Federal Reserve.

Three of 11 indicators held back February's gain. The biggest source of weakness came from a rise in new applications for unemployment benefits.

Other areas of weakness were a drop in the length of the average workweek and a decline in plant and equipment orders. One indicator, the length of time it takes for businesses to deliver orders, was unchanged.

The various changes left the leading index at 140.5 percent of its 1982 base of 100 in February.

by CNB