- The Washington Times - Thursday, September 18, 2003

NEW YORK (AP) — The nation’s long-stagnant economy again showed signs of recovery in August, though the job market continued to be a damper, according to a closely watched gauge of future business activity.

The Conference Board reported yesterday that its Index of Leading Economic Indicators rose 0.4 percent in August to 113.3, in line with analysts’ expectations. The rise in the August reading followed a revised 0.6 percent increase in July.

But the improvement in the economic outlook was tempered by stagnation in the board’s reading of the current business climate, weighed down by continued weakness in the job market.

Analysts said the report points to an economic recovery that continues to strengthen, albeit one where the lack of job creation is a problem.

“Everything is showing us growth except for employment, and it’s the one area where we’re having a little trouble seeing recovery,” said Gina Martin, an economist with Wachovia Corp. in Charlotte, N.C.

Even with that drag, the Conference Board’s reading is a sign that the business environment that should improve in coming months, economists said.

“The economy is improving, although the road will remain bumpy,” board economist Ken Goldstein said. “With export growth still months away, the growth burden remains on consumer spending and business investment.”

The leading index measures where the overall U.S. economy is headed in the next three to six months. It stood at 100 in 1996, its base year.

Four of the 10 components of the leading index rose in August, including improvements in the interest rate spread, vendor performance, real money supply and building permits.

The coincident index, which measures economic conditions, was flat in August, although three of its four indicators increased. The lagging index was also unchanged.

Meanwhile, the latest snapshot of the labor markets was slightly better than economists were expecting. The Labor Department reported yesterday that the number of Americans filing new claims for unemployment benefits declined last week after rising in the three previous weeks.

The government said that for the workweek ending Sept. 13, new claims for jobless benefits fell by a seasonally adjusted 29,000 to 399,000. Last week’s level of claims was not only the lowest since the week ending Aug. 23 but also marked the first time since then that claims dipped below the 400,000 mark.

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