Gauge Points to Sluggish Economy

The government’s leading economic forecasting indicator rose in December at its fastest pace in eight months, the government said Wednesday, but analysts suggested that the economy remains weak although able to avoid a recession.

The Commerce Department said the index of leading economic indicators rose 0.8% in December, helping to inch the forecasting gauge up 0.4% for the year. It was the weakest increase since the index actually fell 1.5% in 1984.

And since the index rose just 0.4% for the year, compared to an increase of 3.9% for all of 1988, it suggests that the economy could be more sluggish this year than in 1989. The index is designed to forecast economic activity six to nine months in the future.

“The leading indicators were essentially flat for most of 1989,” noted Kevin Logan, chief economist for the Swiss Bank Corp. in New York. “They basically moved sideways and that’s the situation for the economy at the moment.”