March 21 (Reuters) - The Conference Board said on Thursday its Leading Economic Index for the United States rose last month for the first time in two years on the strength of hours worked at U.S. factories and the surging stock market, among other factors, but the gauge of future activity still signals some headwinds to growth remain.

The business research group's index rose 0.1% in February to 102.8, exceeding estimates in a Reuters poll of economists for a decline of 0.2%. It was the first increase in the index since February 2022 and comes a month after the organization abandoned its prediction that the economy would fall into a recession.

Justyna Zabinska-La Monica, senior manager for Business Cycle Indicators, said the Conference Board's credit gauge and residential construction also helped drive the index higher, but measures of consumer expectations and new orders for U.S. manufacturers have yet to recover.

"Despite February's increase, the Index still suggests some headwinds to growth going forward," she said. "The Conference Board expects annualized US (gross domestic product) growth to slow over the Q2 to Q3 2024 period, as rising consumer debt and elevated interest rates weigh on consumer spending."

An Atlanta Fed model tracking U.S. economic growth currently sees first-quarter output rising at a 2.1% annualized rate, down from 3.2% in the fourth quarter of 2023, but still above the 1.8% rate that Fed policymakers see as the economy's long-term potential.

Fed officials, in fact, on Wednesday raised their estimates for GDP growth this year to 2.1% from 1.4% as projected in December. Growth estimates for the next two years were also revised higher.

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https://www.reuters.com/markets/us/conference-boards-leading-indicators-index-rises-first-time-2-years-2024-03-21/