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This Week’s Economic Roundup

Leading economic indicators suffer first decline in five months; producer prices make biggest drop in three years.
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Overall, economic indicators dropped slightly in February, but small businesses were buoyed by signs of renewed growth, with orders, jobs, and sales all on the rise. Here's a look at this week's economic developments and how they may impact your business.

Lower Expectations

While the outlook for growth remains strong, lower consumer expectations and weak vendor performance dragged the index of leading economic indicators down by 0.2% in February -- the first decline in five months, the Conference Board said Monday.

The monthly index, which forecasts economic conditions in coming months, saw five of 10 components fall last month, including consumer expectations, vendor performance, average weekly unemployment claims, and building permits. Making gains were manufacturers' new orders, the money supply, and average weekly manufacturing hours, the report said.

Over the six-month period ending February, the index rose 1.5% with eight of 10 components gaining strength, the board said.

Also on the rise was the board's coincident index, a measure of current economic activity, with industrial production, payrolls, personal income, and sales figures growing in February, the report showed.

Cheaper Producer Prices

Led by sharp declines in food and energy prices, producer prices overall fell by 1.4% last month, the biggest drop in three years, the Labor Department said Tuesday.

Gasoline prices alone fell 11% last month, while fresh and dry vegetables were down 27.1%, the report showed.

Excluding food and energy, so-called core prices rose 0.3%. Prices for construction equipment, light trucks, and ships, among other capital goods, were up, while prices for computers were down, the department said.

Home Sales Up

After six months of declines, existing-home sales rebounded in February, the National Association of Realtors said Thursday.

Sales of single-family homes, townhouses, and condos jumped by 5.2% to an annual rate of 6.91 million last month.

The gains were likely the result of mild winter weather throughout the country, according to David Lereah, an economist for the association.

The median price for all housing types hit $209,000 last month, a 10.6% gain over the same period last year, with an inventory of 3.03 million homes on the market, unchanged from January, the association said.

Last updated: Mar 23, 2006




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