Ahead of the Bell: Leading indicators seen rising

AP News
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Posted: Jul 21, 2011 7:00 AM
Ahead of the Bell: Leading indicators seen rising

The Conference Board is expected to forecast Thursday that the nation's sluggish growth will continue as summer turns into fall.

Economists believe the private research group's index of leading economic indicators increased 0.2 percent in June. The measure rose 0.8 percent in May after dropping 0.4 percent in April _ the first decline since June 2010. A string of declines could indicate an impending recession. Before April's drop, the leading indicators had moved sharply higher in four of the past five months as the job market improved and the stock market rallied.

The report for June is scheduled to be released at 10 a.m. Eastern and could provide more clues as to whether the economy will continue its current weak growth trajectory.

The economy expanded at a 1.9 percent pace from January through March. Most economists believe growth was similarly weak from April through the end of June.

Federal Reserve Chairman Ben Bernanke has said he believes growth will recover over the next six months. A pullback in gas prices and relief from the supply chain disruptions stemming from the Japanese earthquake and tsunami should help the economy, he said. But he has also talked of high joblessness and a weak housing market as hurdles to a full recovery.

The employment situation only grew worse over summer. Just 18,000 jobs were created in June, the smallest amount in nine months, and the unemployment rate rose to 9.2 percent.

The Conference Board is a private research group based in New York. It uses data that has mostly already been released about real estate, manufacturing, employment, consumer confidence and financial markets in calculating the leading indicator index. The Conference Board also includes its own estimates about manufacturers' new orders and the country's money supply.