Leading Economic Index Falls For Second Consecutive Month

The Conference Board said the U.S. leading index decreased 0.3 percent, the coincident index increased 0.1 percent, and the lagging index increased 0.5 percent in July. The leading index fell in July, the second consecutive decline, and the weakness in the last two months was widespread.

Although it’s too soon to conclude that these declines end the upward trend in the leading index underway since March 2003, this weakness has slowed the growth rate of the leading index into the range of 1 to 2 percent (annual rate).

The coincident index increased in July following no change in June, and growth coninues to be widespread. At the same time, real GDP growth slowed to a 3 percent annual rate in the second quarter of 2004, down from a 5 percent average rate over the preceding four quarters.

The leading index now stands at 116.0 (1996=100). Based on revised data, this index decreased 0.1 percent in June and increased 0.4 percent in May. During the six-month span through July, the leading index increased 1 percent.