The index of leading U.S. economic indicators probably rose for a fourth straight month in July, boosted by fewer claims for unemployment insurance as companies fired fewer workers, analysts said ahead of government and private reports.

The Conference Board's July gauge of how the economy will perform in the next three to six months may have risen 0.4 percent, the median of 54 estimates in a Bloomberg News survey. Also, the Labor Department may say jobless claims stayed below 400,000 for a fifth straight week, partly as a power failure kept some people from seeking benefits.

``The economy is on its way up,'' said Ram Bhagavatula, chief economist for North America at Royal Bank of Scotland Group Plc in New York.

The decline in firings, gains in the money supply and rising stock prices contributed to the jump in the New York-based Conference Board's leading indicators, economists said. The improvements are starting to help boost factory production and may lead to increased business investment and hiring.

``We expect recent gains in financial components to increasingly spread to rises in orders, production and employment measures,'' said Mickey Levy, chief economist at Banc of America Securities in New York.

Jobless claims for the week that ended Saturday are forecast to fall to 395,000 from 398,000.

Factories are meeting improving demand by ramping up production schedules and placing more orders. A noon report today from the Philadelphia Federal Reserve Bank is forecast to show that the region's factories expanded at a stronger pace for a third month in August. The bank's index probably rose to 10 from a reading of 8.3 in July, based on the median forecast.

Tax Cuts

Consumers have more money to spend after the government's $330 billion in tax cuts started reaching paychecks last month. That's making some retailers more optimistic that the pick up in demand will continue for months to come.

Housing is also underpinning economic growth. On Tuesday, the Commerce department in Washington said housing starts unexpectedly surged to the highest in 17 years last month even as mortgage rates rose.

Economists said they expect increased demand stemming from the tax cuts, low borrowing costs and depleted inventories to lead to hiring by year-end.

Weekly jobless claims have declined from an average of about 419,000 in the first half of the year to 394,000 since mid-July as companies slow firings amid signs that the economy is accelerating.

Power Blackout

Part of the expected decline in claims filings for the most recent week stems from the power failure that crippled the U.S. Northeast, Midwest and areas of Canada last week, which may have kept some fired workers from submitting applications.

The blackout likely delayed as many as 15,000 filings for state unemployment claims, helping applications stay below 400,000 for a fifth week, economists said. Many economists consider the dividing line between a contracting and an expanding labor market.

Gross domestic product will expand 3.6 percent in 2004, according to the median forecasts of 55 economists surveyed by Bloomberg News, the fastest expansion since 3.8 percent in 2000.

The money going into consumers' pockets from the reductions in income taxes is coming out of the government's coffers. Receipts fell $54.2 billion short of expenses last month, compared with a July 2002 deficit of $29.2 billion, the Treasury said in Washington. The government's June budget report showed a $21.2 billion surplus, reflecting quarterly tax payments.



Bloomberg Survey

FIRM Jobless LEI Philly
Claims Fed
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Number of replies 36 54 47
MEDIAN 395 0.4% 10.0
AVERAGE 393 0.4% 10.1
High Forecast 410 0.7% 15.0
Low Forecast 375 0.1% 4.8
Previous 398 0.1% 8.3
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ABN Amro n/a n/a 7.0
4CAST Ltd. n/a 0.6% 12.5
Argus Research Corp. n/a 0.1% 5.0
BBVA Bancomer 390 0.7% n/a
BNP Paribas 395 0.2% 10.0
B of A Capital 395 0.4% n/a
B of A Securities n/a 0.4% 10.0
Banc One Investment Adv. 390 0.4% n/a
Barclays Capital n/a 0.1% 10.0
Bear Stearns 400 n/a 10.0
Briefing.com 395 0.6% 11.0
Cantor Fitzgerald 393 0.5% 10.6
Citigroup n/a 0.5% 12.5
Commerzbank 394 0.4% 12.0
Commomwealth Bank n/a 0.4% 10.0
Credit Agricole n/a 0.4% 6.0
Credit Suisse FB n/a 0.4% 10.0
Daiwa Securities n/a 0.5% n/a
Deutsche Bank Research n/a 0.1% 12.0
DekaBank n/a 0.5% 12.0
Dresdner Kleinwort n/a 0.3% 10.0
Exane n/a n/a 12.5
Fleet National Bank 394 0.4% 12.0
Fortis Bank NV n/a n/a 12.0
Gestielle Asset 400 n/a 10.0
Goldman Sachs n/a 0.6% 10.0
Griffin, Kubik, Stephens 382 0.4% 9.8
High Frequency Economics 380 0.6% 12.0
HSBC Markets 405 0.4% 9.0
HypoVereinsbank 390 0.2% n/a
I.D.E.A. n/a 0.3% 9.0
ING Barings n/a 0.4% 11.0
Insight Economics n/a 0.5% 7.5
J.P. Morgan 395 0.5% 12.5
Landesbank BW n/a 0.4% 9.0
Lehman Brothers 395 0.4% 10.0
Maria Fiorini Ramirez 405 0.5% n/a
MCM Moneywatch 390 0.4% 9.0
Merrill Lynch 395 0.5% 9.0
Mizuho Securities 410 n/a n/a
MMS International 400 0.6% 5.0
Morgan Stanley n/a 0.5% n/a
National Bank Financial n/a 0.5% n/a
National City Bank n/a 0.4% n/a
Nesbitt Burns 395 0.5% 10.0
Nomura n/a 0.4% n/a
Nord/LB 395 0.5% 9.0
Nykredit 395 0.4% 10.0
PNC Bank n/a 0.4% n/a
Prebon Marshall 400 0.3% 9.0
Quantit Group 395 0.5% 15.0
RBC Capital Markets 394 0.4% 11.5
RBS Greenwich Capital n/a 0.4% n/a
Ried, Thunberg & Co. 405 0.6% n/a
Scotiabank Group 400 0.5% n/a
Societe Generale 375 n/a 14.0
Stone & McCarthy 400 0.6% 4.8
Thomson/IFR 375 0.6% 7.8
UBS Securities LLC 380 0.5% 15.0
Wells Fargo 400 0.6% 10.0
Westpac Banking 375 0.5% 11.0
Wrightson 380 n/a 10.0