By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — The economy “has lost some steam” and will
grow slowly in the near term, the Conference Board said Thursday as it
reported that its leading economic index ticked down in March.
The LEI declined 0.1% last month, following three months of gains.
Economists polled by MarketWatch had expected the index to rise 0.2% in March. In February, the LEI rose 0.5%.
“In addition to headwinds from government spending cuts, the private
sector economy may struggle to maintain its momentum,” said Ken
Goldstein, a Conference Board economist. “The biggest challenge remains
weak demand, due to nervous consumer sentiment and slow income growth.”
Looking at longer-term trends, the LEI is picking up speed. Over the six
months through March, the LEI rose 1.6%, compared with a gain of 0.1%
over the prior six months.
The LEI is a weighted gauge of 10 indicators designed to signal
business-cycle peaks and troughs. Among the 10 indicators tracked by the
Conference Board’s index, five made positive contributions in March,
led by the interest-rate spread. Other positive contributions came from a
leading-credit index, stock prices, manufacturers’ new orders for core
capital goods and manufacturers’ new orders for consumer goods and
materials.
The largest negative contribution came from consumers’ expectations.
Other negative contributions came from building permits, a manufacturing
new-orders index, weekly manufacturing hours and weekly jobless claims.
Elsewhere Thursday, the government reported that U.S. initial claims for regular state unemployment-insurance benefits were nearly unchanged in the most recent weekly data.
In addition, the Philadelphia Federal Reserve said
Thursday that U.S. manufacturers in the Philadelphia region continued
to expand their business in April, but just barely, and companies were
less eager to hire new workers.
Ruth Mantell is a MarketWatch reporter based in Washington. Follow her on Twitter @RuthMantell.
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