The Conference Board (search) said Thursday that its Composite Index of Leading Economic Indicators (search) rose a sluggish 0.1 percent in July, suggesting that higher oil prices and rising interest rates are tempering the nation's economic growth prospects.

The New York-based Conference Board's index registered 138.3 in July following a revised increase of 1.2 percent to 138.1 in June. The index was unchanged in May.

The July results were in line with economic analysts' projections.

The index is watched closely because it is designed to predict economic activity over the next three to six months.

Ken Goldstein, the board's chief economist, said in a statement that the July figures "suggest moderate growth into the fall."

He added that "the spike in energy prices is one factor in this outlook." And, he said, both businesses and consumers appeared to be more cautious about spending and investment decisions.

Gary R. Thayer, chief economist at A.G. Edwards & Sons Inc. (search) in St. Louis, said the leading indicators "are telling us the economy is poised to do better."

At the same time, he noted, "we have headwinds from high energy prices," which already are depressing consumer confidence. Consumer spending accounts for two-thirds of the U.S. economy.

Although Thayer expects strong economic performance in the third quarter, he believes it could begin weakening in the final three months of the year "if those oil prices remain very high."

The Conference Board's report said that six of the 10 indicators that make up the index contributed to July's increase. They were a drop in claims for unemployment insurance, the interest rate spread, stock prices, building permits, consumer expectations and manufacturers' orders for nondefense capital goods.

Negative contributors were vendor performance, the money supply and manufacturers' new orders for consumer goods. Weekly manufacturing hours were unchanged.

The index of coincident indicators, designed to reflect current economic activity, advanced 0.1 percent in July to 120.8 after rising 0.3 percent in June to 120.7.

The index of lagging indicators, measuring past activity, climbed 0.3 percent for the third consecutive month to 120.0 in July from 119.7 the month before.