Trying to discern the future is always fraught with uncertainties, but rarely has the outlook been as murky as in recent months.

Perhaps it is war and terrorism, or perhaps it is the bursting of the Internet bubble. For whatever reason, prognostication has been a difficult science.

Enter the index of leading economic indicators, a way of looking at statistics to foretell events six to nine months into the future.

With a long track record of success, the index is supposed to be nearly foolproof in outlining what will happen.

Unfortunately, the measurement hasn’t been very prescient recently. After pointing higher in the latter half of 2002, the numbers began wobbling in late winter. Lately, they have pointed lower.

Economist John Silvia expects Monday’s report of the indicators for April to show a rise of 0.3 percent, providing some lift in the subdued mood.

“Things are beginning to look up,” said Silvia, of Wachovia Securities in Charlotte, N.C. “The economy has been quite weak, relative to people’s hopes.”

There are, however, signs of clear improvement, he said, as housing remains strong, consumer attitudes get a lift, and car sales pick up.

In addition, he said, filings for unemployment insurance have dropped, exports are beginning to grow, and businesses are beginning to spend for new capital equipment.

“On balance, the economy will look better as summer begins,” Silvia said. “At this point, people want happiness and joy, while all they are getting is contentment.”

The dollar’s tumble to the lowest levels against the euro in nearly four years has raised suspicions that Uncle Sam is not all that eager to defend the greenback.

Recent comments from the Federal Reserve about a danger of deflation were seen in distant lands as evidence that the central bank wants to print a torrent of money, flooding the economy with cash.

That augurs poorly for the dollar’s health.

The U.S. currency eased by about 21 percent against the euro in the last year. Conversely, the euro is up more than 33 percent against the dollar in the last 15 months.

Despite the dollar’s swoon, economist Carl Weinberg believes concerns about deflation are overblown and misguided.

“We are seeing the decline of some prices, but hardly all,” said Weinberg, of High Frequency Economics, Valhalla, N.Y.

Hardest hit by price drops have been imports and goods that compete with imports, he said.

But there is an important difference, he said, between disinflation, which we are seeing, and deflation, which we aren’t.

“Wages are rising,” Weinberg added. “Disinflation cannot make wages fall, and hence true deflation is impossible.”

With short-term interest rates at a 41-year low, and long-term rates at a subbasement level not seen in 45 years, there are few calls for members of the Fed to further loosen monetary policy.

But Chicago economist William Hummer says there is more than an even chance the central bankers will notch rates downward when they meet in late June.

“Fed Chairman Alan Greenspan has indicated that he may want to make a dramatic statement about the need for a stronger world economy,” said Hummer, of Wayne Hummer Investments.

Accordingly, he says, the Fed will lower rates by a quarter- to a half-percentage point, taking them down to either 1 percent or 0.75 percent.

Hummer added, “That will take short-term interest rates in this country below 1 percent, much like Japan.”

A sharp move lower by the Fed would also assure investors, he said, that there will be no upward pressure on rates for the rest of this year.

The stock market has ignored a seasonal jinx, despite an old aphorism that tells investors, “Sell in May and go away.”

Broad-based measures of the market were up 18 percent between mid-March and the end of last week.

The big question for investors is whether the current rally will be exhausted short of 9000 for the Dow Jones industrial average.

A similar pattern has emerged a half-dozen times since the bear market began more than three years ago. Each time, the market has stalled out near current levels.

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