US leading indicators fell in December

18 January 2008 17:02  [Source: ICIS news]

WASHINGTON (ICIS news)--Leading economic indicators suggest further weakening in the US economy and sluggish growth this year, the Conference Board said on Friday.


The board, a New York City-based non-profit business data and analysis organisation, said its index of leading economic indicators fell by 0.2% in December to 136.5, marking the third consecutive monthly decline and the fourth drop in the index in six months.


Using 1996 as its base measure of 100, the leading indicators index is composed of business survey data in ten areas, including money supply, stock prices, manufacturers’ new orders for consumer goods, building permits and interest rates, among others.


The board said the continuing decline in the US housing sector was the major contributor to the index decline.  However, additional negative impact was produced by a large decline in the average working hours in manufacturing.


Also contributing were smaller declines in manufacturers’ new orders for non-defense capital goods and consumer expectations coupled with a rise in unemployment claims.


The trade group noted that the leading index is down 0.8% from June to December and is 1.4% below its December 2006 level.


“The leading index has weakened sharply since mid-2007, with widespread weakness among its components in the last two months, and it has returned to the level attained in mid-2005,” the board said.


However, the report said, “despite the spreading weakness, the index has declined only 1.5% from its highest level in January 2006, compared with a decrease of about 3% between its previous peak in January 2000 and March 2001”.


While the current index decline is not as sharp as the 2000-2001 drop, the board said the December decline and earlier month falls signal a bumpy economic road ahead.


“Taken together, the recent behaviour of the composite indexes highlights increasing risks for further economic weakness and suggest that economic activity is likely to be sluggish in the near term,” the board said.


The White House and Congress are in the midst of negotiations for a federal economic stimulus plan aimed at reviving US consumer confidence and spending in hopes of forestalling a recession this year.

By: Joe Kamalick
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index