Tags: Leading Indicators

Leading Indicators Rise, Signaling Slow Growth Ahead

Thursday, 21 Jul 2011 10:24 AM

A private research group forecast that the economy will grow slowly as summer turns into fall.

The Conference Board said Thursday that its index of leading economic indicators rose 0.3 percent in June. The index had rebounded 0.8 percent in May after dropping 0.3 percent in April. The April decline was the first since June 2010.

The economy expanded at a 1.9 percent pace from January through March. Most economists believe growth was similarly weak from April through the end of June. Economists blame temporary factors, including a supply chain disruption resulting from the Japanese earthquake and tsunami and a spike in gas prices, for the sharply slower growth compared to the end of 2010.

The June rise in leading indicators suggests that the recent slowdown in growth won't worsen into a recession over the next few months, even with high unemployment and a weak housing market.

Many economists expect a moderate pick-up in the second half of the year.

Federal Reserve Chairman Ben Bernanke has said he believes growth will recover over the next six months. A pullback in gas prices and relief from the supply chain problems should help the economy, he has said. But he has also said high joblessness and a weak housing market are hurdles to a full recovery.

The employment situation has grown worse. Just 18,000 jobs were created in June, the smallest amount in nine months, and the unemployment rate rose to 9.2 percent. On Thursday, the government said the number of people applying for unemployment benefits rose to a seasonally adjusted 418,000 last week. Applications have topped 400,000 for 15 straight weeks, a sign of sluggish hiring.

The Conference Board is a private research group based in New York. It uses data that has mostly already been released about real estate, manufacturing, employment, consumer confidence and financial markets in calculating the leading indicator index. The Conference Board also includes its own estimates about manufacturers' new orders and the country's money supply.

Half of the 10 measures that the Conference Board compiles into its index showed improvement in June. Four declined, and one was steady.

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A private research group forecast that the economy will grow slowly as summer turns into fall. The Conference Board said Thursday that its index of leading economic indicators rose 0.3 percent in June. The index had rebounded 0.8 percent in May after dropping 0.3 percent...
Leading Indicators
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2011-24-21
Thursday, 21 Jul 2011 10:24 AM
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