The economic outlook soured in June on news that building permits hit a 10-year low and jobless claims rose, The Conference Board reported today.
The U.S. leading index, a key barometer of future economic conditions, sank 0.3 percent last month to 137.5, with just three of 10 indicators advancing. Based on revised data, the index rose 0.2 percent in May and dropped 0.2 percent in April.
The drop in building permits made the largest negative contribution to the leading index in June, followed by rising claims for unemployment insurance and souring consumer expectations. The index has been fluctuating around an essentially flat trend since January, The Conference Board reported.
The Conference Board said in a statement that “the number of decreasing components has been slightly more than the number of components increasing in recent months. At the same time, real GDP (which measures the total value of goods and services produced by the Unites States) grew only at a 0.7 percent annual rate in the first quarter of 2007, slowing down from a 2.5 percent rate in the fourth quarter of 2006.
The performance of the leading index so far in the first half of 2007 was mixed with offsetting increases and decreases, and suggests that economic growth is likely to continue, but it is likely to be at a slow pace in the near term.”