An index forecasting economic performance in the United States has declined for a third time in six months, signaling only slow growth in the months ahead.
The Conference Board reported that its Leading Economic Indicator (LEI) dipped a tenth of a percent to 95.7 in August.
Separate measures of current and past economic performance edged up, however.
“The economy continues to be buffeted by strong headwinds domestically and internationally,” said Ken Goldstein, an economist with the Conference Board, a business research and membership group. “As a result, the pace of growth is unlikely to change much in the coming months. Weak domestic demand continues to be a major drag on the economy.”
Based on revised information, the LEI has advanced three-tenths of a percent over the six-month period ending in August, far slower than the 1.8 percent gain during the previous six months.
Gross domestic product, the broad measure of goods and services produced in the U.S., grew at an annual rate of 1.7 percent during the second quarter after posting a 2 percent gain during the first quarter.
“Over the last several months, the U.S. LEI seems to be fluctuating around a flat trend, while strengths and weaknesses among the components remain balanced,” said Ataman Ozyildirim, another economist with the Conference Board.
For August, six of 10 components of the LEI retreated, including building permits, consumer expectations, manufacturing hours, new orders for consumer goods and an index of factory orders. Moreover, average weekly initial claims for unemployment insurance were up. Four more components of the LEI advanced, including the interest rate spread, new orders for capital goods and stock prices. A leading credit index declined.
The Coincident Economic Index (CEI), a measure of current economic performance, edged up a tenth in August to 104.7. The CEI has climbed two-tenths of a percent over the past three months and seven-tenths of a percent over the past six months.
For August, three of four indicators of the CEI advanced: nonfarm payrolls, personal income and sales. Industrial production declined.
The Lagging Economic Index (LAG), a measure of past economic performance, rose two-tenths of a percent in August to 116.5. The LAG has increased eight-tenths of a percent over the past three months.
For August, advancing and retreating components of the LAG were balanced at three each. Commercial and industrial financing, the cost of services and inventories increased. Labor costs and consumer credit decreased even as the average duration of unemployment lengthened. The average prime rate charged by banks held steady.