THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, April 6, 1995 TAG: 9504060353
SECTION: BUSINESS PAGE: D6 EDITION: FINAL
SOURCE: FROM WIRE REPORTS
DATELINE: WASHINGTON LENGTH: Short : 37 lines
The government's main economic forecasting gauge recorded its sharpest drop in 19 months in February. Big stock market gains prevented it from falling even further.
``The signs point to slower growth and moderation of inflation pressures,'' said economist Carl Palash of MCM MoneyWatch. ``There are no signs of a recession.''
The Commerce Department said on Wednesday that the Index of Leading Economic Indicators declined 0.2 percent, matching the drop of July 1993. The index had been flat in January after rising 0.2 percent in December.
The index is designed to help predict activity in the next six to nine months. Three straight moves by the index in the same direction are considered a good indication of where the economy is headed.
The Federal Reserve helped engineer the slowdown by raising interest rates seven times since February 1994, economists said.
Meanwhile, U.S. wholesale inventories rose a larger-than-expected 1.2 percent in February - the eighth consecutive monthly gain - as strong sales led businesses to restock their warehouses.
While overall sales advanced, increases in auto and lumber inventories reflected weaker spending on big-ticket items such as autos and homes. Wholesale inventories totaled a seasonally adjusted $241.2 billion in February, after rising 1.5 percent in January.
KEYWORDS: ECONOMY FORECAST by CNB