Main Economic Barometer Rises 0.8% in March : Leading Indicators Point to Growth Into Next Year

WASHINGTON —  The government’s main economic barometer jumped another 0.8% in March, the Commerce Department reported Friday, bolstering evidence that the economy is likely to continue performing smoothly well past the November election.

The department also announced that it has revised the increase in the index of leading indicators reported for February to 1.3%, up from the 0.9% reported initially. Together, the two represent the largest consecutive increases in the index since December, 1986.

Although many economists view the indicators as volatile and not very reliable, the March figures paralleled other, more stable economic statistics that have pointed to continued economic expansion for the rest of 1988.

Earlier this week, the government reported that the economy grew at a moderate 2.3% annual rate during the first three months of this year, dashing fears of an impending slowdown.

Economists were predictably upbeat about the new statistics. Jerry Jasinowski, senior economist for the National Assn. of Manufacturers, hailed the figures as encouraging, but stressed that the economy’s growth pace is likely to be “moderate” despite the magnitude of the March increase.

Growing Too Rapidly

Lynn Reaser, economist for First Interstate Bancorp in Los Angeles, had a similar assessment. Reaser said she is now projecting that the economy will grow by about 3% for 1988 as a whole--somewhat more buoyant than expected previously but still within the moderate range. Her forecast is in line with most other predictions.

Nevertheless, some analysts are beginning to worry that the economy may be growing too rapidly and eventually could begin overheating, triggering inflation. Reaser said recent declines in the number of people filing unemployment insurance claims, a figure viewed as an early indication of job conditions in coming months, showed the economy to be “moving very quickly toward full employment”--the point at which inflationary pressures intensify. On Thursday, the Labor Department reported that weekly claims for unemployment insurance had fallen to their lowest level since 1973.

The statistics came as the Commerce and Housing and Urban Development departments reported that the housing industry, which had been depressed in the wake of last October’s stock market crash, continued to recover in March, though not quite as rapidly as in the previous month.

Sales of new houses across the country increased 4% in March after adjustment to reflect seasonal patterns, following a 14.1% jump in February that had been one of the steepest in almost two years.

May Spur Buying

Overall sales levels rose to an annual rate of 655,000, from 630,000 units in February. Home sales had dropped 5.8% in January, following similar declines in the two previous months. Analysts said the improvement stemmed mainly from a temporary fall in interest rates.

However, analysts say it is not clear yet how much longer the improvement will last. Interest rates appear to be edging up again. That actually may help spur some last-minute buying in the next few weeks but eventually it will probably dampen sales, they said.

Friday’s revisions in the leading indicators index showed that the economy was somewhat less volatile following the October crash than analysts had thought previously. Besides the other revisions, the department reported that the decline it reported for January actually amounted to only 0.7%, rather than the 1.1% slide that had been announced earlier.

The major factor in the March increase was a rebound in stock prices, which continued the recovery they began at the start of the year. Also contributing to the overall rise were a slowdown in business delivery times, which point to rising demand and short supplies, an increase in the number of building permits, faster growth in the nation’s money supply and a rise in raw materials prices.

Three of the indicators held the index back from even higher gains--a decline in the length of the average workweek, a drop in new orders for plant and equipment and a dip in orders for consumer goods.

Friday’s changes left the overall index at 193.3% of its 1967 average.