
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 6, 1994                   TAG: 9404060104
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

FINAL SNOW-COVERED REPORT OFFERS A POSITIVE FORECAST

The government's chief economic barometer declined for the first time since July, the Commerce Department said Tuesday.

The slight decline in the leading index, a collection of 11 forward-pointing economic statistics, was the first since a 0.2 percent drop last July. Since that time, the index has risen for six straight months, including solid gains of 0.4 percent in January and 0.6 percent in December.

The February drop was more than accounted for by a big decrease in the length of the factory work week and a drop in building permits, both blamed on the severe weather that month. In fact, the government has already reported that the factory work week rebounded in March to an all-time high.

``This should be the last monthly statistic that is snow-covered. If you extract weather, the index is still going up,'' said Robert Dederick, chief economist at Northern Trust Co. in Chicago.

Various analysts said their reading of the index, which is supposed to predict economic activity six to nine months down the road, was that the economy would post solid growth this year of around 3 percent, as measured by the gross domestic product.

That would be down from a breakneck pace of 7 percent GDP growth turned in during the final three months of last year.

David Wyss, an economist at DRI-McGraw Hill, said he thought the just-completed first quarter would show a rate of growth of between 4 percent and 4.5 percent, slowing to an average of 2.5 percent for the rest of the year.

Four of the 11 leading indicators flashed positive signals, with the biggest source of strength coming from a rise in raw-material prices. While rising prices can signal building inflationary pressures, the leading index takes an increase in such products as cotton and wool as a good sign of increasing demand.

Other positive factors were changes in business delivery times, a drop in claims for unemployment insurance and a growing backlog of factory orders for durable goods. One indicator, orders for new factories and equipment, was unchanged.

by CNB