Leading indicators surge in January, point to steady economic expansion in early 2020

The numbers: The economy showed some more sizzle at the start of 2020, pointing to steady growth in the next several months, according to an index that measures the nation’s economic health.

The leading economic index jumped 0.8% in January, the Conference Board said Thursday, increasing twice as much as Wall Street predicted.

What happened: The leading index got the biggest boost from rising permits to build new homes. They hit a 13-year high last month as builders move to step up construction as falling interest rates stoke more demand.

Declining applications for unemployment benefits, higher consumer confidence, record stock prices and cheaper credit also added to the surge in the index.

The leading index is composed of 10 economic indicators designed to signal the high points and low points in the business cycle.

Big picture: The U.S. economy is plowing ahead at a decent 2% pace of growth and a record expansion already 10 and a half years old looks likely to continue, but growing worries about COVID-19 could hurt the economy in the short run if China is unable to contain the novel coronavirus.

If it turns into a global pandemic, there’s no telling how much it could hurt the U.S. and world economies.

Read: Share of union workers in the U.S. falls to a record low in 2019

Market reaction:The Dow Jones Industrial AverageDJIA, +0.00% and S&P 500 SPX, +0.02% were hardly changed in early Thursday trades. Stocks have backed off from record highs amid festering worries over the spread of the COVID-19 illness tied to a novel coronavirus.

The 10-year Treasury yield TMUBMUSD10Y, -2.34% slipped to 1.75%.

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