Economic forecast index retreats

Ends two straight months of increases for the Conference Board measure, which predicts activity in next 3-6 months.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Julianne Pepitone, contributing writer

What progress is the Obama administration making toward ending the recession?
  • It's succeeding
  • The recovery is too slow
  • It's not helping at all

NEW YORK ( -- A index forecasting economic activity fell in February, ending two months of surprise increases, after the government took action to inject money into the ailing financial system.

The index of leading economic indicators fell 0.4%, according to the Conference Board. The reading is intended to predict economic activity in the next 3-6 months.

Analysts were expecting a drop of 0.6%, according to a consensus of economists surveyed by

The index rose unexpectedly in the prior two months. A revised uptick of 0.1% in January (correct) followed a jump of 0.2% in December.

The measure is based on 10 components, six of which increased in February: interest rate spread; index of supplier deliveries; building permits; real money supply; manufacturers' new orders for consumer goods and materials; and manufacturers' new orders for nondefense capital goods.

Some of those six indicators enjoyed surprising upticks in recent economic data.

Housing starts unexpectedly surged 22% February, after falling for eight months. It was the first time housing starts increased since June.

Declines: The remaining four components declined: average weekly initial claims for unemployment insurance; stock prices; index of consumer expectations, and average weekly manufacturing hours.

The components in decline aren't surprising after a slew of negative reports.

The number of people filing initial claims for unemployment benefits fell slightly last week, but continuing claims hit a fresh record high of more than 5.47 million.

The unemployment rate is up to 8.1%, the highest level in 25 years.

Stock prices rallied last week, but the Dow Jones industrial average is still down almost 50% from its peak in October 2007. Consumer confidence fell to a three-month low in February.

Fed takes action: The Federal Reserve in recent months has taken several steps to boost the financial system.

The Fed said Wednesday said it would spend up to $300 billion over the next six months to buy long-term Treasurys, a move designed to free up credit.

The Fed also announced plans to buy an additional $750 billion in mortgage-backed securities in an attempt to lower mortgage rates. The benchmark lending rate remained unchanged, as it was already at a record-low range of 0-0.25%.

It's hoped that these actions will inject liquidity into the credit markets and spark lending.

-- An earlier version of this story did not note the January revision. regrets the error. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.