Another Storm Cloud For Economy
In this photo made from surveillance video and released by the Tennessee Bureau of Investigation, Adam Mayes, 35, stands in front of the counter at a convenience store on April 30, 2012 in Union County, Miss., about three days after Jo Ann Bain and her daughters disappeared. Authorities say Mayes abducted Bain and her three daughters. Bain and her oldest daughter were found dead. The two younger girls are still missing. (AP Photo/Tennessee Bureau of Investigation)
The Conference Board said the U.S. index of leading economic indicators fell 0.2 percent in August after a revised 0.1 percent drop in July and a 0.2 percent fall in June.
The July index was initially reported as down 0.4 percent.
The August drop was larger than expected. Wall Street economists had forecast an 0.1 percent decline.
Three straight monthly declines in the leading index are generally considered by economists as a sign of economic recession.
"There is now the threat of a slowdown, because unlike in June or July, the latest decline was widely diffused -- only one of the 10 components had a significant positive contribution," said Ken Goldstein, the board's chief economist.
The coincident index, which gauges current economic trends, rose 0.1 percent in August after being unchanged in July and up 0.3 percent in June.
"The coincident index shows an economic recovery, but there is a danger that even this weak recovery could stall, especially if the consumer market starts to slow," Goldstein said.
Seven of the 10 components that make up the leading indicators index were negative in August, led by the Treasury yield curve and initial jobless claims.
Of the other three, money supply was the strongest positive contributor. The average workweek and stock prices also posted positive readings in August.
The U.S. economy is "not getting any thrust from capital spending at this point," said Bill Barker, investment strategy consultant at RBC Dain Rauscher in Dallas.
Barker said consumer spending has held up surprisingly well in recent months, with purchases of big-ticket items such as cars and homes leading the way.
His fear is that consumer confidence will erode as the stock market continues to sputter and that increased talk of war with Iraq will keep more people in front of their televisions instead of out shopping.
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