Thursday, August 19, 2010

Tame Leading Economic Indicators in July

Bloomberg details:

The index of U.S. leading indicators rose in July for the second time in four months, extending a see-saw pattern that indicates slower growth through the end of the year.

The 0.1 percent gain in the New York-based Conference Board’s gauge of the prospects for the economy in the next three to six months followed a 0.3 percent decline in June that was larger than initially estimated. The June decrease was the biggest since February 2009.

Manufacturing, which led the economy out of the worst recession since the 1930s, will probably moderate in coming months as a slowdown in consumer spending depresses orders. Federal Reserve policy makers last week said the recovery was “more modest” than they had projected, prompting them to take additional steps to revive growth.

“Economic growth is going to slow in the second half and we might face something a little more ominous than that,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who accurately forecast the gain in the leading index. Recent economic data “have shown marked deceleration in economic activity or even some pull-back.”