A closely watched gauge of future economic activity dipped 0.1 percent in March following a revised drop of 0.5 percent the previous month, suggesting that the nation's economy could weaken later in the year.

The Conference Board, a private research group, said Thursday that its Index of Leading Economic Indicators dropped to 138.4 in March from 138.5 the previous month.

Click here to visit FOXBusiness.com's Economy page.

The declines followed four consecutive months of rising readings and came as soaring crude oil prices and higher interest rates are expected to begin cutting into consumer spending, which is the engine for two-thirds of the nation's economic growth.

The March reading was slightly below analysts' projections; they had expected the index to show no change in March from February.

The index is closely watched because it predicts economic activity three months to six months in the future.

Ken Goldstein, labor economist at the New York-based Conference Board, said the latest index readings appeared to be signaling weaker economic growth ahead.

"With the price of a barrel of oil rising above $70 and with interest rates slowly increasing, the global economy isn't likely to be picking up steam soon," he said in a statement. Higher oil prices, he said, would boost business costs and, likely, prices to consumers, dampening spending.

"The latest leading indicator readings suggest some slowing in the pace of economic activity through this summer," Goldstein concluded.

Few economists, however, are predicting a recession. Most believe the U.S. economy grew at an annual rate of about 5 percent in the January-March quarter but that growth currently is slowing to a rate closer to 3 percent.

The report was released as oil prices soared to new intraday trading records overseas.

In London, oil prices briefly hit a record high above $72 a barrel. The spike came a day after data showed a drop in U.S. gasoline stocks raised worries that refiners don't have an adequate inventory cushion ahead of the peak summer season.

Traders also are anxious that U.S.-led efforts to stop Iran, OPEC's second-largest member, from pursuing a suspected nuclear weapons program could lead to a disruption in Persian Gulf oil supplies.

Oil futures contracts through November 2009 are now trading above $70 a barrel, indicating traders believe high prices could be here to stay.

The Conference Board report said that five of the 10 components of the leading index increased in March: vendor performance, stock prices, consumer expectations, manufacturers' new orders for consumer goods and the interest rate spread. Negative contributors were building permits, average weekly claims for unemployment insurance, manufacturers' new orders for nondefense capital goods and the money supply. Average weekly manufacturing hours were unchanged.

The index of coincident indicators, which measures current economic activity, rose 0.2 percent in March to 122.4 after rising 0.2 percent in February to 122.1. The index of lagging indicators, reflecting past performance, advanced 0.3 percent in March to 122.9 after rising 0.1 percent in February to 122.5.

Click here to visit FOXBusiness.com's Economy page.