Leading Indicators Index Falls By Most in Year

New York, NY, Aug. 21, 2008–The index of leading economic indicators fell in July by the most in almost a year, according to the Conference Board.

The organization’s gauge dropped 0.7 percent, more than forecast and the biggest decline since August 2007, after an unchanged reading in June, the New York-based group said today. The index points to the direction of the economy over the next three to six months.

The worst housing recession in a quarter century, rising job cuts and shrinking access to credit raise the risk that consumer spending will falter by year-end, bringing the economic expansion to a halt.

The index was forecast to decline 0.2 percent, according to economists.

The index decreased at a 1.8 percent annual pace over the past six months. A decline of around 4 percent to 4.5 percent at an annual pace is one signal a recession is imminent, according to the Conference Board. The gauge met that requirement in January, when it dropped at a 4.7 percent pace.

Declines in building permits and stock prices moved the index lower.

Housing subtracted 0.53 percentage point. Building permits, a sign of future construction, fell 18 percent in July, while work began on the fewest houses in 17 years, the Commerce Department reported this week.