Although the leaders signal recovery, there are reasons to question its durability.

The economy continues to show signs of recovery. All 11 of the leading indicators with a discernible trend are expanding, and the cyclical score of the leaders, a purely mathematical measure, has increased to 88 from 77. The percentage of coincident indicators expanding has increased to 100 from 75 based on positive signs in employment, and the cyclical score of the coinciders has increased to 69 from 65.

Among the primary leading indicators of business conditions, there were continued improvements in those tied to consumption. We upgraded our appraisal of new orders for consumer goods to probably expanding from indeterminate after it rose 2 percent in March. (This series and all other dollar-denominated series are adjusted for price inflation.) Strong growth continued in new orders for core capital goods, driven by orders for construction and industrial machinery. And the Association of American Railroads reports a 15 percent increase in rail traffic, a traditional economic indicator, in the past 12 months.