Newspaper article THE JOURNAL RECORD

Reports Indicate Subdued Growth

Newspaper article THE JOURNAL RECORD

Reports Indicate Subdued Growth

Article excerpt

WASHINGTON (AP) _ A flurry of government data is adding to mounting evidence that economic growth will be subdued this year, particularly as higher interest rates apply the brakes in the second half of 1994.

The Commerce Department said Thursday the Index of Leading Economic Indicators, the government's main forecasting gauge of economic activity, was unchanged in April.

While the index is at a record high, it has shown no advance in two of the three most recent reports after increasing for six straight months.

The Commerce Department also said orders to U.S. factories declined 0.1 percent in April, the second drop in three months.

And retail stores reported clothing sales were down in May, putting a crimp in what had been a good year so far for merchants.

Also, the Labor Department reported the number of first-time unemployment claims declined by 4,000 last week, the third consecutive weekly drop. But the four-week moving average of weekly claims was up to its highest level in more than three months.

"I see a pause. I don't necessarily believe the economy is in danger of stalling or going into recession," said economist Paul Kasriel with the Northern Trust Co. in Chicago.

"It may be a pause that refreshes," he said, noting the Federal Reserve has boosted short-term interest rates four times this year to keep growth in check and head off inflation. Slower economic expansion could influence the Fed to postpone further rate increases.

"It should be noted that the flattening of the economy came about before the May increase of interest rates," said Robert Barr of the U.S. Chamber of Commerce. "The economy is in no danger of overheating."

The Index of Leading Economic Indicators remained at 101.2, matching the March figure, which was the highest since the government began keeping the gauge in 1948.

The index has risen in seven of the last nine months, remaining unchanged in February as well as April. …

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