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Leading Indicators Fell in June

An index of U.S. economic health slipped in June, the first decline since March 2003, adding to signs that the economy has lost some of its momentum in recent weeks…

In testimony before Congress this week, Federal Reserve Chairman Alan Greenspan dismissed signs of slowing economic growth. "The expansion is self-sustaining [and] has become more broad-based," Mr. Greenspan said, adding that recent "softness in consumer spending ... should prove short-lived."

Economists at Nomura Research International in New York also say June was merely a lull. They forecast in a research note yesterday that real, or inflation-adjusted, growth in gross domestic product will accelerate to 3.9% in the current quarter from an estimated 3.7% in the second quarter.

But Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a New York research firm, said recent data point to "a downshift of economic growth" toward a rate of 3% or so from around 4% to 5% in recent quarters. The economy isn't slipping back into recession, Mr. Achuthan said, but is reverting toward its long-term growth trend.

Separately, the Labor Department reported that the number of U.S. workers filing first-time applications for unemployment benefits declined last week.

Initial jobless claims decreased 11,000 to 339,000 in the week ended July 17. The initial jobless-claims figure for the previous week was revised up by 1,000 to 350,000. The four-week average, which smooths out weekly fluctuations, declined 2,500 to 336,750.