Signs Point To Weaker Growth Economists Split Over Whether Reports Raise Warning Flags

The U.S. economy was clearly weakening at the end of 1995, with a national gauge of future activity failing to show strength for a third consecutive month and the Federal Reserve reporting widespread signs of a slowdown.

The statistical drought caused by the 21-day government shutdown ended with three reports Wednesday, but economists split over whether the new information was raising warning flags about a possible recession or merely depicting a slowdown following a spurt of summer activity.

The most disturbing development was a 0.3 percent drop in the Index of Leading Economic Indicators for November, which followed an even bigger 0.5 percent October decline.

The Federal Reserve, in its latest survey of regional business conditions, said, “The national economy was growing at a generally modest pace at the end of 1995.”

In a more upbeat, if dated report, the Commerce Department said that the U.S. trade deficit shrank slightly in October, declining 2.5 percent to $8.04 billion, the smallest imbalance in nearly a year.