The government’s main economic forecasting gauge recorded its sharpest drop in 19 months in February. Big stock market gains prevented it from falling even further.
“The signs point to slower growth and moderation of inflation pressures,” said economist Carl Palash of MCM MoneyWatch, financial advisers in New York City. “There are no signs of a recession.”
The Commerce Department said Wednesday the Index of Leading Economic Indicators declined 0.2 percent, matching the drop of July 1993. The index had been flat in January after rising 0.2 percent in December.
The index is designed to help predict activity six to nine months down the road. Three straight moves by the index in the same direction are considered a good indication of where the economy is headed.
The price of stocks was one of only three of the gauge’s 11 components that advanced in February. The others were an increase in unfilled orders for durable goods and more business orders for plant and equipment.