Index suggests economy weakening
The Conference Board said that its index of leading economic indicators fell 0.3 percent last month to 135.0 after dipping a revised 0.4 percent in January to 135.4.
The February reading was in line with the 0.3 percent decline expected by analysts surveyed by Thomson Financial/IFR.
The index is designed to forecast where the nation's economy is headed in the next three to six months.
Many economists believe rising gas prices, falling home prices and tightening credit markets have begun squeezing consumers and businesses, forcing them to cut spending. As a result, the U.S. economy may have stopped growing in the current quarter and could continue faltering in the second quarter. That would meet a technical definition of a recession -- two consecutive quarters of negative growth.
Ken Goldstein, labor economist at the Conference Board, said in a statement accompanying the report that economic signals "are flashing yellow."
He said the numbers indicate "the economy may be grinding to a halt" and that "a small contraction in economic activity cannot be ruled out."
A further sign of economic deterioration came as the Labor Department reported that the number of newly laid off workers filing for unemployment benefits rose last week to the highest level in nearly two months.
The report said applications for jobless benefits totaled 378,000 last week, an increase of 22,000 from the previous week and far more than expected.
The Conference Board said the leading index has declined 1.5 percent since August, with eight of its 10 components showing declines.
In the latest month, the biggest negative influences were unemployment insurance claims, building permits, vendor performance and consumer expectations.
The coincident index, which measures current activity, was unchanged for a third consecutive month at 124.9. The lagging index was up 0.2 percent in February after rising 0.1 percent in January.
The ratio of the coincident index to the lagging index -- a measure of future economic performance that some economists monitor -- dipped just a bit in December as it has every month since August.
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