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A widely watched indicator of the economy's direction rose only slightly in April, giving little sign of a postwar bounce in activity.

The New York-based Conference Board said today that its Index of Leading Economic Indicators rose by 0.1 point last month to 110.6.

The research institute said the measure was buoyed by the rise of the stock market and consumer expectations, but weakness in the labor market and manufacturing held it down.

The slight rise matched analyst expectations.

The index, which attempts to measure where the economy is headed in the next three to six months, fell 0.2 points in March.

"While the economy is growing and not losing momentum, growth is very slow and will be that way for at least a few more months," Conference Board economist Ken Goldstein said.

"Gross domestic product increased at only a 1.5 percent annualized rate in each of the last two quarters and these current index readings suggest that GDP growth in the second quarter may not be much better than that," he said.

The leading index now stands at 110.6. It stood at 100 in 1996, its base year.

The coincident index, which measures current economic performance, declined 0.1 point to 114.9 after holding steady in March.

Half of the 10 indicators the Conference Board uses to derive the index contributed to the rise and four imposed negative contributions. One, new orders for consumer goods, had no effect on the April change.

In addition to the rising consumer expectations and stock prices, increases in the money supply, building permits and a larger spread in the yield between the Treasury's 10-year note and the overnight bank lending rate accounted for the increase. The widening of the spread, or yield curve, signaled investors became more optimistic last month that economic growth would accelerate, pushing up the yield on the 10-year note.

Gary Thayer, chief economist at A.G. Edwards & Sons in St. Louis, said the index readings were mostly a reflection of how the economy did during the war against Iraq and was more upbeat about the economic outlook.

"There really hasn't been enough time after the war to get a clean indicator," Thayer said.

He noted that interest rates are still very low, a tax cut is coming and a declining dollar is boosting American exports.

"We got a lot of good things happening, it's just going to take time for it to happen," Thayer said.

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