Fixes month for leading index and the duration of the decline.
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The U.S. is still muddling along despite a recent slowdown in growth.
The numbers: A survey of economic conditions in the U.S. fell in January and reflected a recent slowdown in growth, but there was a catch: The latest results were incomplete because of the recently ended government shutdown
The leading economic index slipped 0.1% in January, the privately run Conference Board said Thursday. It was flat in December and rose 0.1% in November.
What happened: The decline in the leading index stemmed mostly from an increase in initial jobless claims and “weaknesses in the labor market,” said Ataman Ozyildirim, director of economic research at the privately run board.
The report contains a notable caveat, however. Three of the 10 components — building permits and new orders for consumer and capital goods — were missing due to the 35-day partial federal shutdown. The impasse delayed a slew of government reports on the economy.
What’s more, the government on Thursday said jobless claims sank by 23,000 to 216,000, returning close to pre-recession lows.
Still, the housing market has cooled off and manufacturers have also applied the brakes. So even when the Conference Board issues an update on March 4 it’s unlikely to show any major difference.
Big picture: The industrial side of the economy slowed toward the end of 2018, but the fears of recession have largely evaporated and the U.S. is still expanding at a moderate pace in early 2019. Strong consumer spending is keeping the factories humming.
What’s got manufacturers and other American companies worried, though, is the festering trade dispute with China and a slowing global economy. They’ve taken a more cautious approach to business until the smoke clears.
Read: A Jekyll-and-Hyde economy? Nah. Long expansion unlikely to morph into recession
Read: The rise of the robots and decline of inflation: How AI is keeping prices low
What they are saying?: “It is fair to say that the monthly change in the leading index has centered near zero since last October, and that is not a good thing,” said chief economist Robert Dye of Comerica Bank. “We have no reason to think that the estimates are biased in either direction, so we expect to see no significant revisions when [the government and Conference Board] get caught back up.”
Market reaction: The Dow Jones Industrial Average DJIA, -0.31% and S&P 500 SPX, -0.26% fell in Thursday trades after a surprisingly weak survey of manufacturing conditions in the Philadelphia region.
Read: Philly Fed manufacturing index slumps into negative territory in February
The 10-year Treasury yield TMUBMUSD10Y, +1.80% was flat at 2.67%.
