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US Economic Indicators Point to Slow Growth Through Summer - 2003-05-19

A key U.S. economic indicator suggests the economy will continue its slow growth trend at least through the summer.

The Conference Board, an independent research group, says its leading economic indicators index grew just one-tenth of one percent in April. Economic growth has been stagnant for more than a year. April's small increase follows drops in the index in February and March. Conference Board economist Ken Goldstein says the rising stock market and consumer expectation figures in the index are good news.

"There's no sense from any of this that we're moving closer and closer toward a recession. That's not happening," he said. "But on the other hand, the kind of move that we've seen in stock prices, in money growth, in consumer expectations, we haven't seen that in the labor market indicators, the manufacturing indicators, the household indicators."

Mr. Goldstein says slow orders for goods kept the index from climbing higher.

"This opens up a very interesting scenario. And that is, the expectations are positive and getting more positive," he said. "But the indicators of activity, they're not budging. Now that's a real split. And certainly it's not going to stay split for very long."

Mr. Goldstein says expectations may come down, but it's more likely that economic activity will increase. He expects manufacturing indicators to improve, but not for some time. He expects slow growth to continue through the summer.

Increasing jobless figures dragged down the leading index. Ken Goldstein expects the labor market to improve, but not until other indicators pick up.

"We're really looking forward to a better economy. That's the good news," he said. "The bad news is we're looking for maybe October, November, December, not for July and August."

Jobless figures have increased over the last three months.