By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — The economy “has lost some steam” and will grow slowly in the near term, the Conference Board said Thursday as it reported that its leading economic index ticked down in March.
The LEI declined 0.1% last month, following three months of gains.
Economists polled by MarketWatch had expected the index to rise 0.2% in March. In February, the LEI rose 0.5%.
“In addition to headwinds from government spending cuts, the private sector economy may struggle to maintain its momentum,” said Ken Goldstein, a Conference Board economist. “The biggest challenge remains weak demand, due to nervous consumer sentiment and slow income growth.”
Looking at longer-term trends, the LEI is picking up speed. Over the six months through March, the LEI rose 1.6%, compared with a gain of 0.1% over the prior six months.
The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks and troughs. Among the 10 indicators tracked by the Conference Board’s index, five made positive contributions in March, led by the interest-rate spread. Other positive contributions came from a leading-credit index, stock prices, manufacturers’ new orders for core capital goods and manufacturers’ new orders for consumer goods and materials.
The largest negative contribution came from consumers’ expectations. Other negative contributions came from building permits, a manufacturing new-orders index, weekly manufacturing hours and weekly jobless claims.
Elsewhere Thursday, the government reported that U.S. initial claims for regular state unemployment-insurance benefits were nearly unchanged in the most recent weekly data.
Ruth Mantell is a MarketWatch reporter based in Washington. Follow her on Twitter @RuthMantell.
