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Indicators signal summer recovery from recession

The government's chief economic barometer posted a broadly based 0.6 percent gain in April, and analysts said the third straight monthly advance pointed toward a summer recovery from the recession. The Commerce Department said Friday that six of the 11 contributors to its Index of Leading Economic Indicators turned up. One was unchanged.

In a second report, the department said orders to U.S. factories rose 1.8 percent in April, the first gain in six months. That suggested some easing in the hard-hit manufacturing sector.

"The data supports the view that the recession is nearly at an end and that the recovery is not too far away," said economist Gilbert Benz of the Swiss Bank Corp. of New York.

Surveys show most economic forecasters think the recession will end this quarter, which ends June 30.

The Bush administration also contends the economy will turn up by mid-summer.

Most analysts agree, however, that the recovery will not be robust, dampened by a lack of government stimulus and high levels of business and consumer debt.

"The recovery will be gradual and unspectacular," suggested said economist Gordon Richards of the National Association of Manufacturers.

The leading index is designed to foretell economic activity six to nine months in advance.

"When you get three months of increases, it's a signal ... that does show we're on the brink of a turn" in the economy, said Stephen S. Roach, senior economist with Morgan Stanley in New York.

The increase in April's factory orders suggested to some analysts that the hard times in the manufacturing sector already may be easing. The Commerce Department said the new bookings totaled a seasonally adjusted $230.5 billion, up from $226.4 billion in March.

But as Kermit Baker of Cahners Economics in Newton, Mass., said, "I wouldn't expect to see any sustained improvement until sometime in the fall. We'll see (orders) flip-flop for the next few months."