The U.S. leading index, a key barometer of economic conditions, sank 0.2 percent in August, the Conference Board reported, taken lower by sagging home construction and waning consumer confidence.
The leading index now stands at 137.6. Based on revised data, this index decreased 0.2 percent in July and increased 0.1 percent in June.
Three of the 10 indicators that make up the leading index increased in August: stock prices, real money supply, and manufacturers’ new orders for consumer goods and materials.
Weakening housing permits and consumer expectations made the largest negative contributions to the leading index in August, offsetting significant positive contributions from average weekly hours in manufacturing and vendor performance.
From February to August, the leading index fell by 0.6 percent (a -1.2 percent annual rate), and has declined in five of the last eight months. Weaknesses and strengths among the leading indicators have been fairly balanced in recent months, resulting in a trend that is more flat than declining.
The leading index has fallen below its most recent high reached in January, but it was still 0.4 percent above its year-ago level in August. At the same time, real GDP growth slowed to a 2.5 percent (annual) rate in the second quarter, following a 5.6 percent gain in the first quarter. The behavior of the leading index so far suggests that economic growth should continue at a slow but steady pace in the near term.
The Conference Board is a nonprofit research and business group.
