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Economic data show slowing economy

By CHRISTOPHER S. RUGABER
AP Economics Writer

WASHINGTON – A measure of the U.S. economy’s future health declined slightly in March, signaling that growth could slow this spring.

The Conference Board says its index of leading indicators dipped 0.1 percent last month to 94.7. That’s the first decline after three months of gains. The gauge is designed to anticipate economic conditions three to six months out.

Declines in consumer confidence, housing permits and new orders for manufactured goods pushed down the index.

Higher stock prices and a larger spread between long-term and short-term interest rates offset the decline.

The index is derived from data that for the most part already have been reported individually.

“Data for March reflect an economy that has lost some steam,” said Ken Goldstein, an economist at the Conference Board.

Across-the-board government spending cuts that kicked in March 1 likely are weighing on growth, Goldstein said. Economists forecast the cuts will shave a half percentage point from growth this year.

The private sector also is struggling, Goldstein said.

“The biggest challenge remains weak demand, due to nervous consumer sentiment and slow income growth,” he said.

But overall, “the leading indicator still points to a continuing but slow growth environment,” said Ataman Ozyildirim, also an economist at the Conference Board. The board is a research group with a mostly business membership.

The leading-indicator index has increased 1.6 percent in the last six months, much faster than the 0.1 percent gain in the previous six months.

Other reports issued last week point to modest growth. Weekly unemployment applications rose only slightly last week and remained at levels that suggested hiring could rebound in April.

Most economists forecast growth accelerated to an annual rate of about 3 percent in the January-March quarter, up from a 0.4 percent rate in the fourth quarter.

But many analysts expect growth is slowing in the April-June quarter, mostly because of the spending cuts. Some economists are forecasting a growth rate of 1.5 percent for the second quarter.

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