Newspaper article THE JOURNAL RECORD

Index of Leading Indicators Down 1 Percent for March

Newspaper article THE JOURNAL RECORD

Index of Leading Indicators Down 1 Percent for March

Article excerpt

WASHINGTON (AP) _ The government's chief economic forecasting gauge recorded its worst drop during March in more than two years, signaling lethargic growth this year.

"There's no real oomph,' an economist said.

The Index of Leading Indicators fell 1 percent, the sharpest decline since November 1990, in the middle of the recession, the Commerce Department said Tuesday.

At the White House, President Clinton used the report to prod Congress to enact his proposed budget-deficit cuts, which he said would stimulate the economy by keeping interest rates low.

"The best thing we can do for the economy this year clearly ds to pass a multiyear deficit-reduction plan because of what it will do to interest rates," he told reporters in the Oval Office.

He said at the moment he did not plan any new initiatives but, "I wouldn't rule anything out down the road."

His press secretary, Dee Dee Myers, blamed the economy's sluggishness on Clinton's Republican predecessors' "failure to invest" and warned it "cannot be fixed overnight."

The index is designed to predict economic activity six to nine months in advance. Three consecutive declines are a good, although far from foolproof, sign of a recession ahead.

Economists said the index's movements so far this year signaled sluggish growth rather than a renewed recession. The index rose 0.5 percent in February, edged down 0.1 percent in January and jumped 1.7 percent in December, the biggest increase in 10 years.

"I don't think we're headed into some dark night," said economist Paul W. Boltz of T. Rowe Price Associates in Baltimore.

"It's just that there's no real oomph."

He attributed the latest drop partly to a blizzard that hit the Northeast in the mid-March, but said it also reflected fundamental problems. These include employers' reluctance to expand their payrolls and weak export sales to troubled economies in Europe and Japan.

Economist Mark M. Zandi of Regional Financial Associates in West Chester, Pa. …

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