NEW YORK — A private sector group’s index of leading economic indicators fell more than expected in March, but the forecast called for the recession’s intensity to ease this summer.
The Conference Board said Monday that its monthly forecast of economic activity fell 0.3 percent in March and has not risen in nine months. Economists surveyed by Thomson Reuters expected a 0.2 percent decline.
The index is designed to forecast economic activity in the next three to six months based on 10 components, such as stock prices, the money supply, jobless claims, new orders by manufacturers and building permits.
The index for February was better than previously reported, falling 0.2 percent instead of 0.4 percent. But it was revised lower in January to a 0.2 percent decline, instead of a 0.1 percent increase.
“The recession may continue through summer, but the intensity will ease,” Ken Goldstein, economist at the Conference Board, said in a release. “There have been some intermittent signs of improvement in the economy in April, but the leading economic index and most of its components are still pointing down.”
Dragging the index lower were building permits, stock prices and vendors’ deliveries to businesses.
But there were three positive indicators in March, including growth in the real money supply from Federal Reserve programs to pump up the economy. Also pointing higher were the wide “interest rate spread,” or difference between the interest rates for 10-year Treasurys and the benchmark federal funds rate, and the consumer expectations index.
In the six months through March, the index fell 2.5 percent, nearly double the 1.4 percent drop in the six-month span through February.
In spring, however, there has been some positive news. The Dow Jones industrials rose about 15 percent since their February bottom.
Auto sales in March jumped 25 percent from the month before, construction of new homes seems to have stabilized, and earnings from big banks have been better than expected. Bank of America Corp. on Monday became the latest to report a profit that beat analysts’ expectations — even as it put up $6.4 billion to cover future credit losses.
The National Association for Business Economics’ latest quarterly survey, also out Monday, showed that while companies and trade associates are more pessimistic about U.S. economic growth, more companies are seeing increased demand for their products. There also was a slight uptick in businesses reporting increased capital spending, but more than half still said they were cutting back, according to the NABE report.
Still, the labor market likely will stay weak and more claims for unemployment insurance helped drag down the Conference Board index.
The Labor Department said last week that while new jobless claims were at the lowest level since late January, people continuing to collect unemployment insurance rose above 6 million for the first time.
Many economists expect the unemployment rate — now at a 25-year high of 8.5 percent — to hit 10 percent by the end of the year.
On Monday, a General Motors Corp. executive said 1,600 white-collar workers will lose their jobs in the next few days as the struggling automaker chops away at the 47,000 worldwide layoffs set to happen this year.