U.S. Economy: Leading Indicators Index Declines 0.4%
A measure of the economy’s future performance dropped and the number of Americans collecting unemployment benefits surged to a record, evidence the recession is deepening as policy makers try to unfreeze credit markets.
The Conference Board’s index of leading indicators, a gauge of the economy’s direction over the next three to six months, fell 0.4 percent in February, less than forecast. Manufacturing in the Philadelphia area shrank for the 15th time in 16 months, a Federal Reserve report showed, and the Labor Department said 5.47 million Americans are getting jobless benefits.
“The economy is still in a mess” and manufacturing won’t turn around until consumer spending and exports pick up, said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, who accurately forecast the drop in the leading indicators index. “The Fed’s aggressive action removes a big downside risk and will support a recovery later this year.”
Today’s figures underscore the picture of a worsening economy that provided a backdrop for the Fed’s meeting this week, when the central bank pledged to buy as much as $1.15 trillion in assets to pump more money into the banking system. Chairman Ben S. Bernanke forecasts an economic recovery in 2010 as long as policy makers take sufficient action.
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