Economic Indicators

Stocks soared again yesterday, building on four weeks of gains, thanks to strong earnings reports from a key retailer and increased investor confidence that the U.S. economy is rebounding and corporate accounting scandals are a thing of the past. "You've got a decent economy, low interest rates, no inflation, a neutral Fed and [a belief that] most corporations are showing legitimate earnings growth through the end of this year," said David L. Berman, head of Berman Financial Group LLC in Timonium.

LITTLE ROCK, Ark. -- As more than 300 delegates arrived here for today's opening of President-elect Bill Clinton's economic summit, the conference's organizer said a middle-class tax cut would be included in the new administration's economic program despite signs of economic recovery."

Federal Reserve policy-makers, concerned that a shortage of workers and a scorching economy will touch off inflation, raised a key interest rate a quarter-point to 5.75 percent yesterday -- an action that was anticipated and that economists believe presages further rate increases to keep the record economic expansion humming. "I think this is the right thing to do to prolong growth in an economic expansion that's now 107 months old," said Philip J. Schettewi, senior managing director of Newark, N.J.-based Prudential Global Asset Management, which oversees $100 billion.

Eddie C. Brown's business is investing money, but he's also passionate about giving it. Brown founded Brown Capital Management in Baltimore, which manages $2.6 billion on behalf of clients, and he's an active local philanthropist. With wife Sylvia, he has given large donations to institutions ranging from the Enoch Pratt Free Library to the Maryland Institute College of Art. They've spent $6 million, and expect to donate more, to launch and support a middle-school achievement program based at The Crossroads School in Baltimore.

WASHINGTON -- Federal statisticians have begun the most ambitious effort since the late 1950s to remedy mounting deficiencies in measuring the nation's economic performance.Government and private analysts worry that the statistical system increasingly fails to capture the numbing array of new technologies and structural changes in today's $7 trillion economy.Indeed, it is widely believed that government tax and spending policies along with monetary regulation by the Federal Reserve have been thrown off to some extent by misleading data.

The welfare rolls can be a good economic indicator of what's ahead for the state's economy, according to a study released yesterday by the University of Baltimore's Center for Business and Economic Studies.Referring to the number of people receiving Aid to Families with Dependent Children benefits, Michael Conte said, "It is probably a better leading economic indicator than a number of other things we look at," including newspaper help-wanted ads, new-car sales and building permits.Dr. Conte is director of the university's division that provides information and analysis to help promote the economic development of the Baltimore area and the state.

Making sense of the government's maze of monthly economic indicators is so challenging that many Americans simply tune them out.Is the inflation arrow pointing up? Down? Sideways?What about joblessness? Are more workers being hired, or are huge companies showing them the door?For those on Wall Street who oversee enormous mountains of paper assets, a slight fluctuation in such statistics can mean fortunes gained, or lost.For bond traders, millions of dollars can turn within 15 minutes after the release of a government report.

If members of Congress have any doubt about the need to quickly pass an economic stimulus package, here are some persuasive reasons: (diamond) Unemployment increased by 500,000 jobs in December, bringing total jobs lost to 2.6 million since 2007. That's the largest annual job loss since World War II, and the unemployment rate of 7.2 percent is the highest in 18 years. (diamond) Americans lost more than $8 trillion in the stock market and $6 trillion in housing wealth in 2008. Over the last year, the Dow Jones industrial average lost 34 percent of its value, and home sale prices declined nearly 20 percent through the third quarter, as measured by the S&P Case Shiller national home price index.

Two new reports yesterday indicated continuing strength in the U.S. economy, increasing the likelihood that the Federal Reserve will keep raising interest rates in an attempt to slow growth. A widely watched predictor signaled that the economic expansion, now in a record 110th month, would continue well into the year; a second report showed sales of new single-family homes surged in March to their fastest pace in 18 months despite rising mortgage rates. The predictor, the Index of Leading Indicators, rose 0.1 percent in March after falling 0.3 percent in February, the Conference Board said.

A weekly briefing on the economic calendar Monday Leading economic indicators for May Thursday Existing home sales for May Friday Durable goods orders for May; New-home sales for May