The U.S. leading index, a key barometer of economic conditions, fell in April, the Conference Board reported today.

The leading index decreased 0.1 percent last month and now stands at 138.9. Based on revised data, this index increased 0.4 percent in March and decreased 0.4 percent in February. During the six-month span through April, the leading index increased 1.5 percent, with eight out of 10 components advancing.

Housing permits made the largest negative contribution to the leading index in April. However, the strengths among the leading indicators have been widespread in recent months.

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

After slowing down in 2005, the leading index picked up somewhat in the first four months of 2006, but it is only slightly above its level at the end of 2005. Moreover, the small gains since December have not been very persistent. The current behavior of the leading index suggests economic growth should continue moderately in the near term.

The Conference Board is a nonprofit research and business group.

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