January's Index of Leading Indicators slumped a bit, but not enough (according to the Conference Board) to suggest any big problem with the pace of U.S. economic growth.
The Conference Board announced today that the U.S. leading index decreased 0.3 percent, the coincident index remained unchanged and the lagging index increased 0.3 percent in January.
The leading index declined in January, but this follows increases in the previous two months, and there were significant upward revisions to the leading index from August to December. In addition, there has been more widespread strength in the leading indicators in recent months, with weakness concentrated in vendor performance and the interest rate spread...
The leading index was on a rising trend from early 2003 to the middle of 2004, but has now fluctuated around a flat trend over the last six or seven months (which is below its long-term trend of a 1.5 percent annual rate). The recent behavior of the leading index is consistent with the economy continuing to expand in the near term, but more slowly than its long-term average growth rate.
Nonetheless, today's news from the Fed remained relatively cheery, as noted at Bloomberg:
The U.S. economy, the world's largest, will grow at an average 3.7 percent annual rate in the first half of the year, a survey by the Federal Reserve Bank of Philadelphia showed Feb. 14. The economy expanded 4.4 percent in 2004, the most since 1999.
The economy is growing "at a reasonably good pace'' with low interest rates and low inflation, Federal Reserve Chairman Alan Greenspan told the House Financial Services Committee today. His written remarks were identical to his testimony before the Senate Banking Committee Wednesday.
Here's the link to the Philadelphia survey.