Data point to weak economic growth

A private business group says its index of leading economic indicators inched higher for the second month in another sign that higher fuel and food prices, tighter credit and a depressed housing market are stifling the economy.

Separately, the number of newly laid-off workers filing for unemployment benefits remained at worrisomely high levels despite dropping slightly last week.

The New York-based Conference Board said Thursday that its gauge of economic indicators rose 0.1% in May, matching expectations of economists surveyed by Thomson IFR. The increase in the indicators, a measure of future economic activity, equaled April’s 0.1% advance. The Conference Board revised March’s number down to zero from a 0.1% rise.

The index is designed to forecast economic activity in the next three to six months based on 10 components, including stock prices, building permits and initial claims for unemployment benefits.

“The economy is very weak heading into the summer, with gas and utility bills possibly heading even higher,” Conference Board economist Ken Goldstein said. “But latest data suggest the economy has not fallen into a contraction and may not undergo one in the second half of the year.”

The Labor Department reported Thursday that jobless claims fell by 5,000 last week to 381,000 after having surged by 27,000 the previous week.

The small improvement was not enough to keep the four-week average from rising to 375,250, pushing it close to the level reached in early April when the average had jumped to highs not seen since the wave of layoffs after the 2005 Gulf Coast hurricanes.