Leading indicators show economy remains sluggish

May 19, 2008 7:35:23 AM PDT
A private business group said Monday that its index of leading economic indicators edged higher in April, a sign the economy remains sluggish but could skirt a dramatic downturn. The New York-based Conference Board said its forecast of future economic activity rose 0.1 percent in April, matching a 0.1 percent increase in March. Economists had expected a 0.1 decrease in April.

The index is designed to forecast economic activity in the next three to six months based on 10 economic components, including stock prices, building permits and initial claims for unemployment benefits.

"These data certainly reflect a weak economy but not one in recession," said Ken Goldstein, labor economist at The Conference Board. The small increases in March and April, which followed five months of decline, could be a signal the economy may not weaken further, he said.

Stocks crept higher after the numbers were released, with the Dow Jones Industrial Average up 19.78, or 0.15 percent, to 13,006.58. The Standard & Poor's 500 was up 2.94, or 0.21 percent, to 1,428.29 and the Nasdaq composite index rose 7.58, or 0.30 percent, to 2,536.43.

Six of ten leading indicators rose in April, including stock prices, interest rate spreads and housing permits. Those increases more than offset the sharp declines in average weekly hours worked and consumer spending.