THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, February 2, 1995 TAG: 9502020378
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: Short : 39 lines
The government's main economic forecasting gauge rose slightly in December while construction spending ended the year on a high note, possibly due to unusually warm weather.
The Commerce Department said Wednesday its Index of Leading Economic Indicators rose a mere 0.1 percent in December after climbing 0.3 percent the previous month. The index declined 0.1 percent in October for only its second drop in 17 months.
The gauge ``was basically flat during the fourth quarter (of 1994), pointing to an early 1995 slowdown,'' said economist Bruce Steinberg of Merrill Lynch & Co.
The index is aimed at predicting activity six to nine months down the road. Three straight moves in the same direction are considered a good gauge of where the economy is headed.
In another report, the Commerce Department said construction spending increased 1.1 percent in December and rose 8.7 percent for 1994, the biggest gain since an 18.3 percent rise in 1984. Spending on residential, nonresidential and government projects in December totaled $530 billion at a seasonally adjusted annual rate.
But analysts attributed the December gain to warmer-than-normal weather and predicted slower growth ahead.
The economy grew 4 percent in 1994, its best showing in a decade, and closed out the year by advancing at a robust 4.5 percent annual rate in the fourth quarter.
KEYWORDS: ECONOMY by CNB