Leading Indicators Fell in June
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.