US recovery shows signs of slowdown
BUSINESS conditions improved for the 28th consecutive month in the US, according to the Chicago Business Barometer, published yesterday.
However, growth slowed, with the index falling from 58.8 to 54.9. Any figure above 50 represents improvement. Production growth slowed from 60.5 to 57, while new orders dipped from 61.5 to 56.
Economists pointed to the expectations part of the index as a relatively positive indicator, as it only fell 0.8 points to 76.2.
“This component is more closely correlated with future spending so the report is consistent with continuing, if not stellar, growth,” said James Knightly from ING.
Meanwhile home prices fell 0.7 per cent on the Case-Shiller index, suggesting the economy is weaker than economists expected – though analysts at BNP Paribas suggested an upturn may be on the way.
“There are better times ahead,” said the bank’s Teunis Brosens.
“Prices follow sales with a lag of several months. Sales have been improving recently, and we therefore expect prices to stabilise in a few months’ time. A sustained rise in prices is some time away though.”
And the Conference Board’s index of consumer attitudes fell to 61.1 in January from 64.8 in December, with Americans turning gloomy about job and income prospects.