Index of Future Economic Conditions Reaches Highest Level in Four Years

A composite index of economic indicators rose in January, offering more definitive evidence of an improving economy. The Conference Board's barometer of leading economic indicators climbed 0.4 percent last month to reach the highest level since July 2008.

The index is intended to gauge economic conditions three to six months from now, thereby suggesting a sustained economic recovery ahead of this fall's presidential election. Seven of the 10 indicators rose in January, driven largely by a widening in the gap between short-term and long-term interest rates.

"That indicates that investors buying long-term bonds want to be compensated for taking on the risk that inflation is going to pick up over the longer term because the consensus view is that rising inflation will accompany a strengthening economy," The Associated Press reports. "Three indicators held the index back. The largest negative was a drop in consumer expectations."

Auto sales have improved, alongside unemployment claims and factories production. Earlier this month, the Labor Department reported a dip in the unemployment rate to the lowest level in nearly three years: 8.3 percent.