2008: Slow Growth, No Recession

Also Thursday, the Conference Board reported that its composite index of leading indicators, which is intended to show the economy's future direction, fell to 135.8 in January after an upwardly revised 0.1% drop in December. The reading matched the 0.1% median decrease estimate of 17 economists surveyed by Dow Jones Newswires Monday.

With January's decline, the leading index has fallen 2% -- a decline of a 4% annual rate -- from July 2007 to January 2008, the largest six-month decline in the index since early 2001, the private research group said. In addition, weakness among the index components have been more widespread than the strengths in recent months.

In January, stock prices made the largest negative contribution to the index, and housing permits also made a large negative contribution. Smaller negatives came from manufacturers' new orders for nondefense capital goods and interest rate spread. Positive contributors were real money supply, average weekly jobless claims, consumer expectations and vendor performance...

Looking at the figures, Ken Goldstein, labor economist at the Conference Board, said that while the leading index declined, the coincident index, which measures where the economy is at present "remains slow but steady."

The coincident index "is a better indicator than [gross domestic product] of where we are right now," Mr. Goldstein said, "and since [that index] was still showing a positive change in January, then the economy was not in recession." However, he said, "the change in the leading index, including the duration, intensity and dispersion across markets, suggests weak growth going forward."

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Despite the continued fear, it appears the economy will avoid a recession in 2008.