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Weekly Leading Index Falls

A weekly gauge of the U.S. economy edged down off an eight-month high last week as the conclusion of most hostilities in Iraq laid bare what might be deeper weaknesses in the U.S. economy, a report showed on Thursday.

"The story earlier was that the real economy was up but investor confidence was down, adding up to a weak but non-recessionary economic picture," ECRI Managing Director Lakshman Achuthan told Reuters. "This has now flipped such that the real economy has started to weaken a bit but is offset by a more positive perception of the market (by investors)."

The index's growth rate, a four-week moving average which smoothes out weekly fluctuations, also fell last week, to -0.1 percent from 0.4 percent.

The U.S. Commerce Department reported Thursday that first quarter 2003 Gross Domestic Product rose 1.6 percent, shy of expectations that it would rise by 2.3 percent.

"That's the kind of story we're returning back to -- an economy that is growing, but not enough to create jobs or give anyone a lot of confidence about the future," Achuthan said.

The Weekly Leading Index is composed of several major economic indicators. ECRI designs short- and long-term indexes aimed at predicting business cycles, recessions and recoveries in the world's leading economies.