The Index of Leading Economic Indicators fell in April, the fourth consecutive month that the index has declined.
The New York-based Conference Board’s gauge declined 0.2 percent following a 0.6 percent decrease in March that was the biggest since September 2001. The measure attempts to project the likely performance of the economy over the next three to six months.
“Clearly overall growth is decelerating,” said Michael Gregory, a senior economist at BMO Nesbitt Burns in Toronto.
Half of the 10 indicators that make up the Conference Board’s leading index contributed to the decline in April.
An index of consumer confidence in the future course of the economy, as measured by the University of Michigan, fell to 77 in April from 82.8 the month before. A preliminary report for this month, released on May 13, showed the gauge dropped to 73.7, the lowest level since March 2003.
High gasoline costs are chipping away at confidence. The average price of a gallon of self-serve gasoline rose to a record $2.32 a gallon in April and has been higher than $2 since early March. The price in the week ended May 16 was $2.21.
The narrowing of the spread between the federal funds rate and the yield on the 10-year Treasury note subtracted 0.11 percentage points from the index. The spread has the greatest weight of all the indicators that make up the index.
The yield on the 10-year Treasury note averaged 4.32 percent in April compared with 4.5 percent in March. The federal funds rate averaged 2.78 percent last month and 2.63 percent in March.
Also weighing on the leading index are declines money supply, stock prices, and faster vendor deliveries, which is a sign of less demand.