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There is likely to be a slowdown of US economic growth in the forthcoming months following the downturn in the housing industry which is taking a deeper expense on businesses and customers, a pattern of future financial activity showed Thursday.
In June, the Conference Board affirmed that the index of leading economic indicators dropped 0.3 percent, 0.1 percent more than experts and analysts were expecting to and more than the 0.2 percent reversing revised growth of last month.
10 economic indicators are tracked and analyzed by the report of the Conference Board, designed to observe financial and economic activity over a period of 3 to 6 months.
In their report, the 5 negative comtribuitors were classified according to the magnitude: building permits, unemployment claims, consumer expectations, selling performance and spread of interest rate.
The positive ones were also classified according to the same criteria, and these are: weekly hours of manufacturing, new orders for non-defense capital goods and stock prices. Orders of the manufacturers for the goods of the consumers and real money supply and materials were steady in June.
Following this latest report, there has been registered a 0.7 percent drop in the index of cumulative change, recorded over the past six months.
Reserve Chairman Ben Bernanke affirmed, in his economic report to the Congress on Wednesday, that economic growth may be weakened by consumer spending if the situation regarding housing slump becomes worse than anticipated.
The Chairman also stated that there will be a slower growth rate for the year than the central bank forecasted it in February.
Bernake pointed out also another economic risk, the case in which energy prices keep their whooping raise. That could determine the prices of other products and services to follow, expanding the inflation thorought the economy.
Thursday, the stocks had to trade higher, because of some reports concerning some upbeat earnings. The Dow grew 0.69 percent, reaching 14.013.74.
As if following Dow's example, Broader stock too rose. 8.88, that is 0.57 percent advanced the index for The Standard & Poor's, and reached 1,555.05, while Nasdaq index grew too 0.75 percent hiting 2,719.83.
08:57
Posted on Jul-26-2007
