After reporting three consecutive monthly increases, the Conference Board released a report on Thursday showing an unexpected drop by its index of leading U.S. economic indicators.
The Conference Board said its leading economic index edged down by 0.1 percent in March following a 0.5 percent increase in February. Economists had expected the index to increase by 0.3 percent.
Ken Goldstein, an economist at the Conference Board, said, "Data for March reflect an economy that has lost some steam."
"In addition to headwinds from government spending cuts, the private sector economy may struggle to maintain its momentum," he added. "The biggest challenge remains weak demand, due to nervous consumer sentiment and slow income growth."
The modest decrease by the leading index reflected negative contributions from consumer expectations, building permits, ISM new orders, average workweek in manufacturing and initial jobless claims.
The negative contributors offset positive contributions from all of the financial components and manufacturing new orders for both capital and consumer goods.
The Conference Board also said that the coincident economic index dipped by 0.1 percent in March following a 0.5 percent increase in February.
The pullback by the coincident index reflected a negative contribution from personal income less transfer payments.
Meanwhile, the report showed that the lagging economic index rose by 0.3 percent in March after coming in unchanged in the previous month.
The increase by the lagging index reflected positive contributions from the ratio of consumer installment credit to personal income, the ratio of manufacturing and trade inventories to sales and the change in unit labor costs in the manufacturing industry.
"Taken together, the current behavior of the composite indexes and their components suggest that the expansion in economic activity should continue in the near-term, but the pace of growth is not likely to accelerate in the second half of the year," the Conference Board said.
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