The Conference Board's leading economic indicators are offering positive signs about the economy's future. They've risen for five months straight -- a sign not only that the recession has likely ended, but also that we'll probably see growth continue into next year.

Good news, right? Not so fast.

Some argue that the dramatic steps the government has taken to address the recession have skewed the indicators' ability to tell how much the economy is hurting. Also, the indicators don't tell us when we'll see the key indicator of economic health for most Americans -- new jobs.

So how should we interpret these numbers?

 

Who comes up with these leading indicators?

They come from the Conference Board, a private research group founded in 1916 that produces a variety of economic statistics, including the Consumer Confidence Index. It first independently published the index in January 1996, taking over from the Department of Commerce.

 

What do the indicators tell us?

The combined index is meant to show what's going on with the economy in the next three to six months.

It's made up of average stock prices from the Standard & Poor's 500 index, employment data (average weekly manufacturing hours and average weekly initial claims for jobless aid), building permits, estimates of manufacturers' new orders for consumer goods, deliveries by

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suppliers to businesses, consumer expectations, interest rate spread (the difference between yields on 10-year Treasury notes and the federal funds rate and an estimate of the money supply).

 

So the leading indicators don't say what's going on right now?

No. But the Conference Board also releases a "coincident economic index," which gauges the current state of the business cycle. That measure inched up 0.1 percent in July, its first growth in nine months, but was flat in August.

 

So why are some economists still worried?

Because the government's been so involved in this recovery, said Jennifer Lee of BMO Capital Markets. It's bailed out the financial and auto sectors, pumped money into the economy, helped Americans buy a first home and kept interest rates near zero. The question that the indicators don't answer, Lee said, is "whether the economy can keep itself going without assistance."

The Conference Board said Monday that although a "recovery is very near ... the intensity and pattern of that recovery is more uncertain."

 

What about jobs? When will we see new job creation?

The leading indicators can't tell us that, either, though the job market has been very slow to recover. The Federal Reserve has predicted the unemployment rate, which hit a 26-year high of 9.7 percent in August, will top double digits and decline "only gradually" in 2010.