The Index of Leading Economic Indicators (LEI) moved up to .08 from .01.

However it will falter when March’s LEI is released because of the unexpected rise in oil prices caused by the unrest in the Middle East and especially the crisis in Japan.

“The increase of gas prices affects everybody,” said New York City Councilman Peter Koo, a member of Committee of Small Businesses. “Everything depends on oil.”

He said many products are transported or produced using oil and could increase the price of those products for the consumer. Also since it is used as a power source, the price will push down consumer sentiment, which is one of the indicators in the LEI.

A survey from Thomson Reuters and the University of Michigan measuring consumer sentiment released early march showed consumer expectations for inflation jumped to 3.2 percent from 2.9 percent last month as gasoline prices soared.

As of right now the gasoline price is at $3.57 per gallon, which is a $0.78 increase from last year at this time according to U.S. Energy Information Administration.

In addition insecurity about the Middle East and Japan and their affects on businesses is worrisome according to President Pinsky, president of the New York City Economic Development Corporation, a government agency that promotes business in the city.

“Uncertainty is never good for business,” said he said. “And it’s just one of those things we have to monitor.”

Specifically, the uncertainty over Japan’s recovery will continue to make stock prices highly volatile in March. As another component in the LEI, it can either boost or hit the index depending on speculators view on the recovery.

However, Councilman Koo said that Japan is likely to recover quickly from the tsunami and its damaged nuclear plants. This in turn will lower down the speculation raising the gas prices.

Regardless, the current rise in gas prices is not being felt by the business in New York City as severely as in other areas of the United States. According to Seth W. Pinsky, this is because the city is more energy efficient.

“I haven’t noticed any significant increase at my business,” said Tom Adams, owner of Bergen Street Comics in Park Slope.

The shop regularly gets its products shipped to the store from Diamond Comic Distributors, Inc., a comic book wholesaler but Adams has not noticed a dramatic increase in prices. He said it could be a problem if it stays high during the summer when he would need an air conditioner.

Even if the consumer sentiment and the stock prices go down, most of the other LEI components should keep the index from faltering too severely.

“In terms of the other indicators a lot of them have been experiencing underlining improvements since the recovery began in mid-2009 and there is no reason why that shouldn’t continue,” said Ellen Zentner, Senior U.S. Macro Economist for The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Building permits will only have a slight weaken the index. The low permit numbers is a result of builders requesting permits early to bypass stricter building codes for 2011.

That should be compensated by an increase in average manufacturing workweek and lower initial unemployment claims that are continuing to rebound after the snowstorms.

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