An index forecasting economic conditions in the United States has slipped for a second straight month, but continues to signal moderate growth.
The Conference Board reported its Leading Economic Index fell two-tenths of a percent to 123.2 in January. Separate measures of current and past economic conditions both increased.
The decline in the leading index was attributed to a decrease in stock prices and increase in average weekly initial claims for unemployment insurance, said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association. “Despite back-to-back monthly declines, the index doesn’t signal a significant increase in the risk of recession, and its
six-month growth rate remains consistent with a modest economic expansion through early 2016,” Ozyildirim said.
The Leading Economic Index has advanced three-tenths of a percent over the past six months, a fraction of the 1.8 percent gain over the previous six-month period. Weaknesses and strengths among leading indicators have balanced out.
Gross domestic product, the broad measure of goods and services produced in the country, rose seven-tenths of percent in the fourth quarter.
For January, five of the 10 indicators of the index increased, including average weekly manufacturing hours, consumer expectations for business conditions, interest rate spread, new orders for manufactured capital goods and a leading credit index. Declining indicators also included building permits and a new orders index. New orders for manufactured consumer goods held steady.
The Coincident Economic Index, a measure of current performance, rose three-tenths of a percent to 113.2. The index has increased 1 percent over the past six months.
For January, all four indicators of the index advanced: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, edged up a tenth of a percent to 120. The index has increased seven-tenths of a percent over the past three months.
For February, five of seven indicators advanced, including the average prime rate charged by banks, commercial and industrial loans outstanding, consumer credit, the cost of services and inventories.
Labor costs decreased. An increase in the average duration of unemployment also pulled down the index.