Economic activity in August was lackluster and less than forecasted. The Conference Board said that despite slower economic pace of growth, it is still consistent with the economy expanding at a moderate pace.
The board said that its monthly Leading Economic index rose 0.2 percent in August, much slower than the revised 1.1. percent increase in July.
Ataman Ozyildirim, economist at The Conference Board, said:
“The LEI continued to rise in August, although at a slower rate than in July. The LEI’s six-month growth trend has been held back slightly by lackluster contributions from housing permits and new orders for nondefense capital orders. Despite concerns about investment picking up, the economy should continue expanding at a moderate pace for the remainder of the year.”
Ken Goldstein, also an economist at The Conference Board, added:
“The *leading indicators point to an economy that is continuing to gain traction, but most likely won’t repeat its stellar second-quarter performance in the second half.”
* Leading indicators – groups of statistics – are like economic crystal balls. They contain data that point to what is likely to happen in the near future.
What caused the slow pace of growth in August?
The report said that the slow pace of growth was mainly caused by new orders for non-defense capital goods and less applications for housing permits.
In addition, the report said that there has been a slight decrease in industrial production – the first time in seven months.
Despite the slowdown in August, Ken Goldstein says that the index still shows that the US economy is on track to good growth. The economy was hurt earlier this year because of very harsh winter conditions that stalled economic growth.