Leading Indicators Rise 0.1% In March
Thursday, April 19th 2007, 9:58 am
By: News On 6
NEW YORK (AP) _ A barometer of future economic growth rose a tepid 0.1 percent in March, hinting that the U.S. should expect only a meager expansion in the coming months, a private research group said Thursday.
The Conference Board said its index of leading economic indicators climbed an expected 0.1 percent to 137.4 last month. The index is designed to forecast economic activity over the next three to six months.
The latest reading reverses two consecutive months of declines. Despite the latest increase, the index is still below its most recent high of 138 in January 2006.
The reading tracks 10 economic indicators. Six of those readings were positive in March: initial unemployment claims, weekly manufacturing hours, real money supply, vendor performance, building permits, and manufacturers' new orders.
The negative contributors were stock prices, consumer expectations, interest rate spread and manufacturers' new orders.
``It's kind of an encouraging report in the sense that the positive contributors were from the business sector,'' said Gary Bigg, an economist with Bank of America.
Negative contributors, such consumer expectations, should rebound next month in response to recent gains in the stock market, he said. Still, Bigg said the reading indicated fairly sluggish growth for the remainder of the year.
Stocks fell in trading Thursday, as investors abroad sold off stocks globally amid concerns that China's economy might be growing too quickly.
In midmorning trading, the Dow Jones industrial average fell 14.15, or 0.11 percent, to 12,789.69. On Wednesday, the Dow reached fresh trading and closing highs, perhaps signaling a recovery from the late February pullback.
The Standard & Poor's 500 index fell 2.05 to 1,470.45 after hitting a new 6 1/2-year high Wednesday. The Nasdaq composite index fell 6.24 to 2,504.26.
In other economic data Thursday, the Labor Department said weekly applications for unemployment benefits slipped by 4,000 to 339,000 after hitting a two-month high a week earlier. The data may be signaling that the labor market remains generally healthy.
The Conference Board report comes amid a mixed batch of earnings reports this week that revived concerns that profit growth was slowing.
EBay Inc.'s first-quarter results, which showed a 52 percent surge in profit, came as a pleasant surprise after the market closed Wednesday, but Nokia Corp., the world's largest mobile phone maker, said Thursday that first-quarter net profit declined by 6.6 percent amid slipping handset prices. Investors still have a heavy schedule of other tech earnings ahead of them: Google Inc., Advanced Micro Devices Inc. and First Data Corp.