Although a key gauge of economic activity fell
0.3 percent in February, the U.S. economy so far has avoided
slipping into a recession, the Conference Board said Thursday.
The New York-based private research group said its Index of
Leading Economic Indicators decreased to 108.7 last month after
increasing a revised 0.5 percent in January.
While the leading index declined in four of the last five
months, it has not declined enough to signal a recession, the group
Nonetheless, the Conference Board provided little encouragement
that the economy would rebound any time soon.
"The Leading Economic Index suggests that this period of slower
growth will probably continue for the next few months," said Ken
Goldstein, economist for the Conference Board.
Other economists agreed, said the report comes as no surprise
and that it simply confirms that the economy is weak.
"The Leading Economic Index is basically telling us what we
already know," said Bruce Steinberg, chief economist at Merrill
Lynch. "Despite the declines in the index, the economy is growing,
although very slowly."
In a separate report released Thursday, the Labor Department
reported that new claims for state unemployment insurance dipped
last week, but still hovered at a level suggesting that employers'
demand for workers has eased.
The markets were mixed following the release of the reports. The
Dow Jones industrial average was off 136.28 at 9,350.72 joining
the other major market indicators in bear market territory more
than 20 percent off its high. The Nasdaq composite index was down
slightly early Thursday, falling 6.10 to 1,824.13
The Conference Board said five of the ten indicators that make
up the leading index increased in February: money supply, interest
rate spread, vendor performance and manufacturers' new orders for
both nondefense capital goods and materials as well as consumer
The negative contributors to the index were average weekly
initial claims for unemployment insurance, index of consumer
expectations, average weekly manufacturing hours, stock prices and
Three of the four components in the coincident indicators, which
measures current economic activity, also increased, helping the
index rise 0.1 percent to 116.5.
The index of lagging indicators, which reflects changes that
have already occurred, decreased 0.4 percent in February to 107.1.