An index forecasting future economic performance in the United States has declined for the first time in seven months, a dip that reflects a recovery that’s yet to fully gain traction.
The Conference Board reported that its Leading Economic Index (LEI) slipped a tenth of a percent in April to 95.5.
The index continues to project expansion at a moderate pace for the near term, however. What’s more, separate measures of current conditions and past conditions both advanced in April.
“The indicators reflect an economy that’s still struggling to gain momentum,” said Ken Goldstein, an economist at the Conference Board, a business research and membership group. “Growth is slow, but choppy, and consumers, executives and investors are looking for more progress.”
Ataman Ozyildirim, another economist with the Conference Board, said a decline in housing permits and subdued consumer expectations, along with more claims for unemployment insurance, offset gains in other components to push down the LEI.
Nonetheless, the index has advanced at a rate of 1.8 percent over the six-month period ending in April, a pace Ozyildirim said remains in “expansionary territory.”
Gross domestic product, the broad measure of goods and services produced in the country, grew at an annual rate of 2.2 percent in the first quarter of 2012 after growing 3 percent in the fourth quarter of 2011.
For April, five of the 10 components of the LEI increased, including average weekly manufacturing hours, interest rate spread, new orders for manufactured consumer goods and materials and new orders and credit indexes. Building permits, consumer expectations for business conditions and stock prices all decreased even as initial claims for unemployment insurance were up. New orders for manufactured capital goods held steady.
The Coincident Economic Index (CEI), a measure of current performance, rose two-tenths of a percent in April to 104.3. The CEI gained 1.3 percent over the previous six months.
For April, all four components of the CEI increased: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index (LAG), a measure of past performance, climbed five-tenths of a percent to 114.9 in April. The index has gained a full point over the past three months.
For April, five of seven components of the LAG advanced. Commercial and industrial financing, consumer credit, labor costs and the price of services all were up, even as the average duration of unemployment benefits declined. Inventories as well as the average prime interest rate charged by banks held steady.