A basket of economic indicators rose in May for the fifth consecutive month.
The Conference Board's leading economic index rose 0.3% to 127 last month. Economists surveyed by The Wall Street Journal expected a 0.3% gain.
The index reading suggests "the economy is likely to remain on, or perhaps even moderately above, its long-term trend of about 2% growth for the remainder of the year," Ataman Ozyildirim, director of business cycles and growth research at the Conference Board.
Comprised of 10 components, including initial claims for jobless benefits, factory orders and the S&P 500's price change, the index is intended to signal swings in the business cycle and to smooth out some of the volatility of individual indicators.
Most leading indicators showed improvement except for housing permits, which declined, and the average workweek in manufacturing, which remained stagnant, said Ozyildirim.
Investors are concerned that the drop in oil prices could affect inflation. Inflation remains stubbornly below the Federal Reserve's 2 percent target, even as the central bank adopts a hawkish tone regarding future rate hikes.
"Right now the bond market seems to be convinced that inflation is going to remain much lower than what the Fed thinks," Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas, told Reuters.
Economic data on Thursday showed jobless claims for last week increased by 3,000 to 241,000, but remain at levels consistent with a tight labor market.
(Newsmax wires services contributed to this report).
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