Slight U.S. growth ahead, data suggest

new york -- A closely watched gauge of future economic activity edged up in July, reversing the previous month’s decline. The recent erratic pattern reflects uncertainty in a U.S. economy roiled by a credit crunch.

The Conference Board said Monday that its index of leading economic indicators rose 0.4% in July, as analysts had expected. The index fell 0.3% in June, after rising 0.2% in May. The report is designed to suggest the level of economic activity over the next three to six months.

The index has bounced up and down over the last few months, suggesting that growth is likely to continue but at a slower pace. With the latest report, the cumulative change in the index over the last six months has been an increase of 0.1%.

The recent movement of the index mirrors the volatility of the financial markets, said Aaron Smith, senior economist at Moody’s Economy.com.

Although July’s pickup is in line with the U.S. economy’s 3.4% annualized growth in the second quarter, the main drivers for the latest index reading -- consumer confidence and jobless claims -- may drop in August, Smith said.

The recent crisis in the financial markets “has yet to manifest itself in the data,” Smith said.

The Conference Board report tracks 10 economic indicators. The advancing components in July were consumer expectations, vendor performance, unemployment claims, real money supply, stock prices and manufacturers’ orders for consumer goods and materials.

The negative contributors were housing permits, manufacturers’ new orders for nondefense capital goods and interest rate spread. Weekly manufacturing hours held steady.