NEW YORK — A gauge of future economic activity rose 0.1 percent in February, suggesting slow economic growth this summer.
The slim rise in the Conference Board’s index of leading economic indicators was the smallest gain in 11 months. It matched expectations of economists polled by Thomson Reuters. In January, the index increased 0.3 percent.
The leading indicators index forecasts economic activity in the next three to six months based on a variety of economic data on housing, jobs, manufacturing and financial markets, most of which has already been released.
“The indicators point to a slow recovery this summer,” said Ken Goldstein, Conference Board economist. “Without increased consumer demand, job growth will likely be minimal over the next few months.”
The leading indicators have risen for nearly a year due to a rebound in the manufacturing sector and the rally in the stock market starting in March 2009. But high unemployment, slow income growth and tight credit are weighing on consumers, leaving the recovery modest.
The Federal Reserve said on Wednesday in its analysis of the economy that the labor market was “stabilizing.” The Fed has predicted that unemployment will remain high for years, however. In February, the jobless rate stood at 9.7 percent.
Only four of the leading index’s 10 indicators increased in February: the interest rate spread, real money supply, supplier deliveries to companies and manufacturers’ new orders for consumer goods.
The interest rate spread is the difference between the cost of borrowing money for 10 years and borrowing overnight. A widening gap between the two can that investors expect inflation to increase or that they expect economic activity to pick up.
Harsh winter weather, which cut down on the hours factory employees worked, and turbulent stock markets were the biggest decliners last month.
Consumer confidence and building permits, a signal of future construction, also sagged, while the number of people filing for unemployment benefits rose. The Conference Board estimated that manufacturers’ new orders for capital goods dropped.
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