Measure of US economy's health up 0.7 percent

The Conference Board said Thursday that its index of leading indicators increased 0.7 percent in August from July. That followed a 0.5 percent gain in July from June.

The index is designed to signal economic conditions over the next three to six months.

Conference Board economists said that the solid gains in July and August were a good sign following an earlier slowdown.

"The latest reading points to more pep in the pace of economic activity in the near term," said Conference Board economist Ken Goldstein. "One unknown is how resilient confidence will remain, both consumer and business, given the mixed signals from the housing and labor markets."

Goldstein said another unknown is how confidence will be affected by the upcoming debates over passing a federal budget to avoid a government shutdown and raising the borrowing ceiling to avoid a market-rattling default on the government's debt.

The gain in the index in August was driven by strength in the labor market and financial sectors as well as by rising manufacturing orders. There was weakness in residential construction and consumer expectations.