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.