- The Washington Times - Tuesday, April 21, 2009

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.

And without the government’s intervention in the economy, boosting the money supply and tamping down interest rates, analysts said the forecast likely would have been worse. Stocks fell sharply as investors worried about the rising levels of bad debt being reported by the nation’s biggest banks.

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,” said Ken Goldstein, an economist at the Conference Board. “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.

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 - now at a record low of zero to 0.25 percent - and the consumer expectations index.

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