Research Group Says U.S. Economic Growth To Slow In Coming Months
Thursday, September 20th 2007, 9:46 am
By: News On 6
NEW YORK (AP) _ U.S. economic growth should lose steam in coming months, a research group said Thursday, indicating a clampdown on credit markets will continue to take its toll on the broader economy.
The Conference Board said its index of leading economic indicators dropped a sharp 0.6 percent in August, slightly higher than the 0.5 percent fall analysts were expecting. The index rose a revised 0.7 percent in July, after slipping 0.1 percent in June. The erratic pattern reflects the ongoing uncertainty over the impact of the credit crisis on the overall economy.
The Conference Board report is designed to forecast economic activity over the next three to six months.
The report tracks 10 economic indicators. Only one of those indicators, real money supply, advanced in August.
The negative components, starting with the largest, were consumer expectations, unemployment claims, stock prices, building permits, vendor performance, manufacturers' new orders for non-defense capital goods, interest rate spread, and manufacturers' new orders for consumer goods.
Weekly manufacturing hours held steady.
With the latest report, the cumulative change in the index over the past six months has increased 0.5 percent.
The report was taken before the Federal Reserve's decision to cut a key interest rate by a half point, a move that sent stocks soaring Tuesday. The bigger-than-expected cut was an effort to ensure the country isn't pushed into a recession by turbulence in the financial markets.
Also on Thursday, the Labor Department said jobless claims declined last week by 9,000, the lowest level in seven weeks. Analysts were expecting a slight rise in claims.
Stocks dipped Thursday following weaker-than-expected earnings at Bear Stearns and caution ahead of testimony before Congress from Federal Reserve Chairman Ben Bernanke. In prepared remarks, Bernanke said the credit crisis has created ``significant market stress'' and gave fresh assurances that regulators would step in to curb the fallout.
The Dow slipped 30.24, or 0.22 percent, to 13,785.32.
The Standard & Poor's 500 index fell 0.24 percent to 1,525.40 and the Nasdaq composite index fell 0.28 percent to 2,659.09.