WASHINGTON – A closely watched gauge of future U.S. economic activity fell in June, confirming momentum has slowed from its heady pace earlier in the year, a private research firm said on Thursday.
The drop broke a string of three consecutive monthly increases in the forward-looking data and was below Wall Street forecasts for an unchanged reading.
"Strong economic performance in May gave way to a weaker June," said Conference Board economist Ken Goldstein "The data reflects a strong economic environment, but one with less momentum."
Goldstein noted that although the leading index declined in June, it was still about 3.4 percent higher in the second quarter than in the first.
Home building moderated in June as mortgage rates edged higher and mortgage applications slowed, and retail and auto sales were also weak, Goldstein said.
"But income growth is relatively stable, and investment in equipment is now the hottest sector in the U.S. economy," he said.
The Conference Board said June's weakness was not widespread, and noted that some of the decline can be attributed to a drop in the average manufacturing workweek — likely because of the closure of many businesses for the funeral of former President Ronald Reagan.
Five of the 10 components that make up the leading index increased in June, led by consumer expectations and stock prices. The largest declines were building permits and average weekly manufacturing hours.
The board said its coincident index rose 0.1 percent in June, down from a 0.3 percent gain in May. The lagging index was unchanged.