Leading Index Of the Economy Fell in August --- Indicators Declined by 1.2%, Steepest Decrease Since Market Crashed in 1987
WASHINGTON -- The government's main yardstick for economic forecasting registered its gloomiest reading in August since the month after the 1987 stock-market crash.</br></br>The index of leading indicators slid 1.2% in August, the month Iraq invaded Kuwait. It was the steepest decline since a 1.4% dive in November 1987. In July the index showed no change, and in June it rose 0.5%.</br></br>The leading-indicators report is one more piece of evidence that the Middle East turmoil, which sent oil prices soaring, took a toll on the U.S. economy.</br></br>The index is composed of 11 sets of economic statistics that economists believe tend to foreshadow overall movements of the economy. Seven of those statistics contributed to the index's decline in August, pointing to weakness across the economy. Consumer confidence, stock prices, capital equipment orders, building permits, unfilled factory orders and the money supply all fell, and claims for unemployment benefits rose.</br></br>The index is supposed to foreshadow the economy's health in the ensuing six to nine months, and three consecutive monthly drops are regarded as a signal of an impending recession.