Indicators Signal Start Of Upturn: 3.6 Percent Surge In Month Biggest...
The index of leading economic indicators shot up 3.6 percent in January, the largest increase since 1950, unmistakably signaling that a recovery from the recession is under way.</br></br>President Reagan said the indicators, which usually foreshadow changes in the economy, ÛÏflashed a bright green light for recovery.Û</br></br>Most economic forecasters saw the large gain as validating their increasingly optimistic predictions of how fast the recoveryÛªs pace will be this year. With the prospect of further large declines in oil prices, many forecasters have raised their estimates of real growth this year by about a percentage point while lowering their inflation predictions by a similar amount.</br></br>Martin S. Feldstein, chairman of the presidentÛªs Council of Economic Advisers, said recent economic statistics have convinced him that the recession hit bottom in December and that January was the first month of the recovery.</br></br>Nevertheless, he noted that part of the big jump in the leading indicators was due to a large increase in the nationÛªs money supply in January, which was related more to the advent of the popular money market deposit accounts than to any change in monetary policy.