Index of US leading economic indicators unexpectedly falls

May 17 (Bloomberg) -- The index of U.S. leading indicators unexpectedly fell in April, indicating the pace of economic expansion may cool.

The Conference Board’s gauge of the outlook for the next three to six months decreased 0.1 percent after a 0.3 percent gain in March, the New York-based group said today. Economists projected the gauge would rise by 0.1 percent, according to the median of 49 estimates in a Bloomberg News survey.

American employers added jobs at the slowest pace in six months in April, restraining the consumer spending that accounts for 70 percent of the world’s largest economy. Higher claims for unemployment benefits, a decline in building permits and weaker consumer confidence contributed to the decline.

“The economy is in a midst of a soft patch, but I don’t think it’s going to be anything worse than that,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “Economic growth this quarter will come right around where it came in last quarter.”

Other reports today showed applications for unemployment insurance were little changed last week, a measure of consumer confidence fell to an almost four-month low and manufacturing in the Philadelphia area unexpectedly contracted in May.

The Standard & Poor’s 500 Index fell 0.2 percent to 1,322.19 at 10:23 a.m. in New York. Yields on 10-year Treasury notes fell to 1.75 percent from 1.76 percent late yesterday.

Estimates for the leading index in the Bloomberg survey of economists ranged from a drop of 0.3 percent to an increase of 0.3 percent.

Contributors to Decline

Four of the 10 indicators in the Conference Board’s leading index contributed to the decrease and one was unchanged. The rest increased.

The index of coincident indicators, a gauge of current economic activity, increased 0.2 percent for a second month.

The coincident index tracks payrolls, incomes, sales and production -- the measures used by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions.

The gauge of lagging indicators increased 0.5 percent after a 0.3 percent gain.

Economic growth in the U.S. advanced at a 2.2 percent annual pace in the first three months of 2012, down from 3 percent the prior quarter. The economy will probably expand 2.2 percent from April to June, according to the median estimate of economists surveyed by Bloomberg from May 4 to May 9.

Slowing labor-market gains may make it harder for consumer spending to accelerate from last quarter’s pace, which was the fastest in more than a year. Payrolls grew by 115,000 in April, the fewest in six months.

Stocks Slide

Stocks have slumped with the weaker economic data and the risk Europe’s debt crisis might impede growth. The Standard & Poor’s 500 Index fell 7 percent through yesterday after reaching a 2012 high on April 2.

Positive news for the economy comes from factory floors. The Institute for Supply Management’s manufacturing index climbed to 54.8 in April, the highest level in almost a year, as orders picked up. Readings greater than 50 signal growth. Demand for autos is also driving production and sales.

“We’ve surveyed all of our business leaders in the last couple of weeks, and the outlook is for continued steady growth, slow but steady growth, across the economy and customer base,” Peter McCausland, chairman and chief executive officer of Airgas Inc., the largest distributor of industrial gases, said during a May 4 earnings call.

Bloomberg News

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