Advertisement

Economic indicators predict slow expansion for the U.S.

From the Associated Press

The U.S. economy should expand only slightly in coming months as it continues to lose steam, a gauge of future growth showed Thursday.

But a resilient labor market indicates the economy remains generally healthy, economists said.

The Conference Board said its index of leading economic indicators climbed a tepid 0.1% to 137.4 in March, as expected. The index is designed to forecast economic activity over the next three to six months.

Advertisement

The latest reading reverses two consecutive months of declines. But the index is still below its most recent high of 138.6 in January 2006 and the year-earlier level of 138.5 in March 2006.

The reading tracks 10 economic indicators. Six of those readings were positive in March: initial unemployment claims, weekly manufacturing hours, real money supply, vendor performance, building permits and manufacturers’ new orders for consumer goods and materials.

The negative contributors were stock prices, consumer expectations, interest rate spread and manufacturers’ new orders for nondefense capital goods.

Advertisement

In other economic data, the Labor Department said weekly applications for unemployment benefits slipped by 4,000 to 339,000 after hitting a two-month high a week earlier.

The decline in jobless claims was significantly smaller than the expected drop of about 20,000. But economists said the data signaled that the labor market remained generally sound even with economic growth slowing over the last year.

Economists have said that as long as the labor market remained steady and there were jobs available, consumers might continue to feel optimistic. Consumer spending has been one of the pillars of the economy’s growth, though there are concerns that higher gas prices and the slumping housing market might undermine spending.

Advertisement

“What we’re seeing is slowing growth and that the economy is losing steam,” said Ken Goldstein, labor economist for the Conference Board.

But he said the drop of 0.3% in the index of leading indicators over the last six months was not big enough to indicate the economy was in any real danger.

The mixed economic news in recent months suggests the economy “could go one way or the other,” Goldstein said.

“The winds are not all blowing in one direction. Who knows? Maybe after Labor Day, we might be talking about an economy picking up steam,” he said.

Advertisement
Advertisement