The Conference Board’s leading economic index for the U.S. fell 0.2% in June to 109.8, following a 0.5% increase in May and a 0.1% decline in April, the board said Thursday, July 22, in a news release.
The drop in the 10-component gauge of the economy confirms that the U.S. recovery is indeed slowing, as economists have been saying over the last two months. Indeed, Federal Reserve Chairman Ben Bernanke said in congressional testimony this week that financial conditions such as unemployment and a lackluster housing market have become less supportive of growth.
The leading economic index (LEI) reading fell within the flat to 0.5% range economists had predicted.
Inside the private New York-based Conference Board, the expectation is that two key economic components will be a drag on growth in the second half of 2010.
“The indicators point to slower growth through the fall,” said Ken Goldstein, economist at The Conference Board, in the LEI release for June. “Two trends will have a direct impact on the pace of economic expansion. First, improvement in the industrial core of the economy will moderate as inventory rebuilding slows. Second, improvement in the service sector has been relatively slow, with little indication that it will pick up momentum.”