Economic downturn likely to persist
The New York-based Conference Board's forecast of future economic activity fell 0.1 percent last month, in line with forecasts by Wall Street economists surveyed by Thomson Financial/IFR.
The group also revised May's number downward to a 0.2 percent decrease, from a 0.1 percent increase.
The financial crisis, high gas and food prices, and the weak dollar "are all combining to produce unrelenting downward pressure on economic activity," said Ken Goldstein, labor economist with the Conference Board. "This is also why it wouldn't take much to push the economy so it's even weaker in the second half of 2008."
The index has slipped 0.9 percent for the six months ending in June, but the rate of decline has improved since the first quarter. The index is designed to forecast where the economy is heading in the next three to six months based on 10 economic components, including stock prices, building permits and initial claims for unemployment benefits.
Manufacturers that make anything related to cars and trucks have been laying off workers, cutting their hours, selling the companies or shutting their doors, said Ralph Hardt, president of Feintool Inc., a Cincinnati component maker.
"The number of auction flyers that come across my desk is back where it was in 2000, 2001, the last recession we had," he said.
A change in New York city's building code saved June's index from a larger drop, said Ian Shepherdson, chief economist of High Frequency Economics in Valhalla, N.Y. Building permits for apartments and condos leapt in New York last month as builders rushed to file permits ahead of a new city construction code. The increase was so large that it boosted the leading index by 0.3 percent, Shepherdson said, a figure that will reverse in July.
Stock investors appeared to ignore the Conference Board data after better-than-expected earnings from Bank of America Corp., but stocks closed lower as oil prices recovered and investors cashed out following last week's rally. The Dow Jones industrial average lost 28.99 to close at 11,467.34. The Nasdaq composite index lost 3.25 to close at 2,279.53 and the Standard & Poor's 500 index edged 0.68 lower, to 1,260.
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I'm sure "Glen Beck" is being sarcastic.
Earl | July 22, 2008 at 5:54 p.m.
I'm glad that I have lots of neighbors that see what is coming...
Frugal Squirrel | July 22, 2008 at 2:08 p.m.
When you say "there's no real problem here", would...
Glen ! | July 22, 2008 at 11:48 a.m.
