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1996 | 08 | 05 | Articles | The Wall Street Journal | Business | Economics
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The Wall Street Journal
August 5, 1996
Leading Indicators Rose 0.5% In June for Fifth Straight Gain
By STEWART UGELOW
Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON — In another forecast of continued economic growth, the index of leading economic indicators rose a strong 0.5% in June, the Conference Board said.

The index’s rise was its fifth in a row, including a 0.3% gain in April and a 0.2% gain in May. Three consecutive increases usually signal that the economy is expanding.

"The economy is on the move again, but the speed of the expansion is uncertain," said Robert Dederick, chief economist at Northern Trust Co. in Chicago.

The index of leading indicators is intended to predict economic activity six to nine months ahead, but many economists say it more accurately reflects current economic conditions. While it is useful for forecasting whether the economy will grow or contract, the index doesn’t indicate the rate at which changes will occur.

For those reasons, analysts said, Monday’s report offered little to resolve their concern about whether the second quarter’s sizzling economic growth will continue in the second half. Federal Reserve Chairman Alan Greenspan warned last month that the economy may be growing too quickly, leading to speculation that the Fed will raise interest rates at its monetary-policy meeting Aug. 20.

But reports of rising unemployment and declining wages released Friday strongly suggest that growth in the third quarter will be more moderate, analysts said.