Leading economic indicators suggest possible (weak) recovery ahead

Finally, some good news for the economy:

Economic weakness will continue through this year, though the recession's intensity could ease over the next few months, the Conference Board said Thursday.

For the second consecutive month, the index of leading economic indicators rose, gaining 0.4% in January, following a downwardly revised 0.2% in December.

"The second half of 2009 may see a period of anemic growth," said Ken Goldstein, economist at the Conference Board. "In fact, a return to robust growth may not occur until well into 2010, even if the long climb starts a few months from now."

The recent gains are due, in part, to the Federal Reserve's huge injections of cash into the money supply. Despite the rise in January, widespread weakness remains as the troubled job and housing markets continue to take their toll.

Some of the index's estimates may be too optimistic, and could be downwardly revised, wrote Ian Shepherdson, chief U.S. economist with High Frequency Economics, in a research note.

"In short, we see no real improvement here despite the rise in the headline," Shepherdson wrote.

The way I see it, a weak recovery is ideal. The economy as a whole stops tanking, but the economy is weak enough that housing prices are likely to continue declining.