The U.S. leading index, a key barometer of economic conditions, fell for the second straight month in March, the Conference Board reported today.

The leading index dipped 0.1 percent last month and now stands at 138.4. Based on revised data, this index decreased 0.5 percent in February and increased 0.4 percent in January. During the six-month span through March, the leading index increased 1.9 percent, with seven out of 10 components advancing.

Just five of the 10 indicators that make up the leading index increased in March. The positive contributors — beginning with the largest positive contributor — were vendor performance, stock prices, index of consumer expectations, manufacturers’ new orders for consumer goods and materials, and interest-rate spread. The negative contributors — beginning with the largest negative contributor — were building permits, average weekly initial claims for unemployment insurance (inverted), manufacturers’ new orders for nondefense capital goods, and real money supply. The average weekly manufacturing hours held steady in March.

The growth of the leading index has slowed steadily since mid-2004 while fluctuating around a moderate upward trend. At the same time, economic activity has slowed from strong to more moderate growth through the first quarter. The current behavior of the leading index suggests economic growth should continue moderately in the near term.

Despite the weakness in the leading index in February and March, its six-month growth rate picked up to an average of 3.2 percent annual rate in the first quarter, up from an average growth rate of 2.7 percent in the fourth quarter, which was higher than its average growth of 1.8 percent in 2005.

The Conference Board is a nonprofit research and business group.

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