U.S. Leading Indicators Index Falls, Reinforcing Forecasts Economy to Slow

BY

The index of leading economic indicators unexpectedly dropped in July, yet another sign that economic growth will continue to slow over the next three to six months.

The 0.1 percent decline followed a 0.1 percent gain in June, the Conference Board, a New York-based research group, said. The index dropped at an annual rate of 1.4 percent over the last six months, the worst performance since February 2001.

Economists expected the index of leading indicators to rise 0.1 percent, the median of 43 forecasts in a Bloomberg News survey. Estimates ranged from a drop of 0.3 percent to an increase of 0.2 percent.

The index isn't signaling a contraction: it would take a 3.5 percent annualized drop during a six-month period to signal a shrinking economy, according to the Conference Board. The last time the index met that criterion was in September 2000, six months before the start of the last recession.