The US index of leading economic indicators fell during April, the first drop in seven months, pointing to a moderating pace of expansion.
Lower stock prices, rising jobless claims and a dip in consumer confidence contributed to the 0.4 percent decline in the Conference Board's index, a gauge of the economy's likely performance over the next three to six months. The index had risen 0.1 percent in March, and April's decrease was twice what analysts had forecast.
The index last fell in September, when terrorists attacked New York and Washington. While the economy has rebounded from a recession that began in March 2001, a statement by Vice President Dick Cheney that further attacks are "almost a certainty" drove down share prices. Companies that are reporting higher orders, such as National Semiconductor Corp, are still eliminating jobs to safeguard profits.
"The signal from the indicators is that the recovery is developing quite slowly," said Ken Goldstein, a Conference Board economist. "The recovery in the industrial core remains weak. The consumer sector has seen income growth cut by employment cutbacks and moderating growth in wages."
The US government's budget surplus narrowed in April to US$67.2 billion from US$189.8 billion a year earlier, the Treasury Department said. Lower tax withholding rates and a weak economy depressed receipts. Seven months into the fiscal year, the government is running a US$66.5 billion deficit, compared with a US$165 billion surplus in the first seven months of last year.
Concern about profits also drove down stocks. The Dow Jones Industrial Average fell by 124 points, or 1.2 percent, to close at 10,229.50. The NASDAQ Composite Index fell by 40 points, or 2.3 percent, to 1,701.59.
Treasury securities rose, as the Conference Board's report bolstered investor expectations that Federal Reserve policy makers will keep interest rates unchanged at least until mid-August. The 4 7/8 percent note that matures in February 2012 gained almost 1/2 point, pushing down its yield 7 basis points to 5.19 percent. A basis point is 0.01 percentage point.
The economy expanded in the first quarter at a 5.8 percent annual rate, the fastest in two years. Growth will probably cool to a 3.1 percent pace this quarter as consumer spending slows and business investment is slow to pick up, according to the latest Blue Chip Economic Indicators survey.
Fed officials say the economy is likely to benefit from low inflation and improved efficiencies.
"It looks to me right now that we have clearly healthy growth in productivity in the economy," Gary Stern, president of the Fed Bank of Minneapolis, said. "That's a plus."
Combined with "moderate growth in demand, that would seem to imply continuation of low inflation and improving profitability over time," Stern said in an interview.
Stern is the latest voting member of the Fed's policy-setting Open Market Committee to suggest the central bank may hold off on raising interest rates for some time. The benchmark overnight bank lending rate has been at 1.75 percent, a 40-year low, for the past five months.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
RSS