The gauge of the outlook over the next three to six months dropped 0.2 percent following a 0.4 percent February decrease, according to the median estimate of 40 economists surveyed by Bloomberg News.
The report will support Federal Reserve Chairman Ben S. Bernanke’s view that the economy is taking a potential “first step” to recovery. The billions of dollars being pumped into financial markets by the central bank are helping to lower borrowing costs, while the Obama administration’
“There are signs that the downturn is starting to abate in certain sectors,” said Douglas Morgan, CEO at Hoffman Meyer Associates in Seattle. “We’ll start to see smaller minus signs” in economic growth.
The New York-based Conference Board’s index is due at 10 a.m. Washington time. Estimates in the survey ranged from a drop of 0.7 percent to a 0.1 percent gain.
Seven of the 10 components of the leading index are known ahead of time: jobless claims, stock prices, building permits, consumer expectations, the yield curve, supplier delivery times and factory hours.
The Conference Board estimates the remaining three -- new orders for consumer goods, bookings for capital equipment and the money supply adjusted for inflation.
Increased lending and purchases of securities by the Fed since credit markets seized last year have contributed to a jump in the money supply, the biggest component of the leading index.
Still, Bernanke last week said the credit crisis will probably cause “long-lasting”
Economists surveyed by Bloomberg in the first week of April forecast consumer spending will falter this quarter after a first-quarter spurt and recover only gradually toward the end of the year. Purchases will drop at a 0.5 percent pace from April to June and grow at an average 0.9 percent rate the next six months, economists forecast.
Gross domestic product will probably decline at a 2 percent pace in the second quarter after an estimated 5 percent drop in the first three months of the year, according to the survey. Growth will pick up to an average pace of almost 1 percent in the second half, the surveyed showed.
The recession that began in December 2007 already matches the longest since 1933, and the 6.3 percent decline in fourth- quarter GDP was the biggest since 1982. The downturn has cost 5.1 million jobs and economists surveyed by Bloomberg forecast the unemployment rate will rise to 9.5 percent by the end of the year.
While residential construction shows signs of stabilizing near a record low, a rebound isn’t likely, economists said. Building permits, a sign of future construction, fell 9 percent in March, while work on single-family homes remained little changed for a third month, the Commerce Department reported last week.
Also contributing to the decline in the leading index last month were a drop in the factory workweek, an increase in claims for jobless benefits and lower stock prices.
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