Economic Indicators May Be Less Leading Than Usual

By John S. McClenahen Ordinarily, the eagerly anticipated index of leading economic indicators compiled by the Conference Board, a New York-based business research group, is a pretty good preview of the U.S. economy three to six months ahead. But that may or may not be the case with the March data, which were released on April 21. The March data show the leading index recording its second straight monthly decline and falling two-tenths of a percentage point to 110.6 (1996=100). Yet, says the Conference Board, "information available so far in April suggests that these declines will not continue." Others are more cautious. "While we expect the [leading economic indicators] should rebound in April as stock prices and confidence are bouncing off their lows, we don't think it will be enough to call it a full-fledged recovery," says David A. Rosenberg, chief North American economist at Merrill Lynch & Co., New York. Meanwhile, says Jerry J. Jasinowski, president of the National Association of Manufacturers, Washington, D.C., the Conference Board's latest report "suggests that the economy will likely stay stuck in the doldrums until the second half of the year unless Congress promptly enacts the tax cut as the president has suggested." However, unless there's a dramatic shift in Congressional sentiment during the next two weeks, the House and Senate are unlikely to agree anytime soon on even the scaled-down $550 billion tax-cut package that President Bush seemed to endorse last week.

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