A gauge of future economic activity rose modestly in January, an industry-backed trade group said Wednesday, suggesting the U.S. economy will continue to post modest gains in the coming months.

The Conference Board said its index of leading economic indicators rose 0.1 percent last month, dampened by the housing market slump and sluggish auto manufacturing. The reading was slower than the revised 0.6 reading from December and lower than the 0.2 percent rise economists were expecting.

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The index, which stood at 138.5 versus a revised 138.3 in December, is closely watched because it is designed to forecast economic activity over the next three to six months.

It tracks 10 economic indicators including building permits, money supply and consumer confidence. Four of those reading rose in January, led by real money supply and consumer expectations.

The slowing growth comes a week after Federal Reserve Chairman Ben Bernanke said that economic growth and inflation are moderating.

Investors got another data point Wednesday when the Labor Department said the consumer prices for January rose by a higher-than-expected 0.2 percent. Falling energy prices only partially offset big increases in the cost of medical care, food and airline tickets. The consumer price index is one of the primary indicators the Fed uses to gauge the pace of inflation.

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