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