US leading indicators fall for 4th straight month

21 February 2008 16:33  [Source: ICIS news]

WASHINGTON (ICIS news)--US leading economic indicators fell in January for the fourth straight month, suggesting continuing business weakness and sluggish growth for the near term, the Conference Board said on Thursday.

 

The board, a New York City-based non-profit business data and analysis organisation, said its closely watched leading index fell by 0.1% in January from December to 135.8.

 

“With this month’s decline, the leading index has fallen 2% from July 2007 to January 2008, the largest six-month decline in the index since early 2001,” the board said.

 

On an annualised basis, the six-month decline would represent a 4% drop.

 

The board’s leading index is a composite of several economic and business measures, including manufacturers’ new orders, building permits, stock prices, consumer expectations and the number of claims for unemployment insurance, among others.

 

The January index fall was attributed chiefly to continuing declines in the US stock market and building permits, the latter being an indication that the country’s key home building industry is still facing weakness.

 

“The leading index has continued to decline since its most recent highest value reached in July 2007, and the weakness among leading indicators has become more widespread,” the board said.

 

“Taken together, the current behaviour of the composite indexes suggests increasing risks for further economic weakness and that sluggish economic growth will likely continue in the near term,” the board said.

 

The board’s sober report on current US economic prospects came a day after the organisation predicted that the US housing correction is nearing an end and that overall business activity has continued to rise along with export trade and corporate profits.

 

“While there is continuing uncertainty about the economic outlook,” the board said on Wednesday, “economic shocks from the contracting financial sector are not enough to tip the US economy into a recession.”

By: Joe Kamalick
+1 713 525 2653

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