The index of U.S. leading indicators rose in January and the cost of living climbed less than forecast, pointing to sustained economic growth with limited price pressures.

The 0.4 percent increase in the Conference Board's gauge of the outlook for the next three to six months followed a 0.5 percent rise in December, the strongest back-to-back gains in almost a year. The consumer-price index rose 0.2 percent in January after no change, the Labor Department said today.

An improvement in the labor market and increased hours worked may help deliver the income gains needed to encourage Americans to boost spending. A lack of inflation gives Federal Reserve policy makers room to keep interest rates low through 2014 to ensure the expansion endures a global slowdown.

"There is some pretty good momentum in the economy," said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. "Inflation seems to be in a sweet spot -- not too hot, not too cold."

David Fuller's view US economic news has been gradually improving for months and it just got a little better. I attribute this mainly to QE which puts the economy on steriods, the stock market recovery which improves confidence, plus the US gas and oil production boom which creates jobs and a competitive advantage in energy costs among countries which are major manufacturers.