Leading Economic Indicators Rise in July
August 20, 2009 - 10:29 AMA private research group says its forecast of economic activity rose for a fourth straight month in July, but at slower pace than in the past three months.
The Conference Board's index of leading economic indicators gained 0.6 percent last month, slightly less than economists expected. The index, which is meant to project economic activity in the next three to six months, climbed 0.8 percent in June and 1.2 percent in May.
Still, the Conference Board said Thursday that the indicators suggest the recession has bottomed out, and growth in economic activity will begin soon.
The six-month growth rate rose to 3 percent through July, up from 2.1 percent through June. That's the highest growth rate since mid-2004, the Conference Board said.
Six of the 10 indicators that comprise the index increased in July, including employment data and stock prices.
The biggest gainer was the "interest rate spread," the difference between yields on 10-year Treasurys and the federal funds rate at which banks lend to one another, which is at a record low near zero. A big difference between the two is viewed as positive because investors are willing to lend for longer periods.
Consumer expectations hindered growth in the index more than any other factor.
An accompanying index meant to measure the current state of the business cycle was flat in July, after dropping for eight straight months, the Conference Board said.
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