“Data for March reflect an economy that has lost some steam,” Ken Goldstein, an economist at the Conference Board, said in a statement today. “The biggest challenge remains weak demand, due to nervous consumer sentiment and slow income growth.”
The Conference Board’s index of coincident indicators, a gauge of current economic activity, fell 0.1% in March after rising 0.5% in the prior month.
The coincident index tracks payrolls, incomes, sales and production, which are the same measures tracked by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions.
The gauge of lagging indicators advanced 0.3% after no change in February.
Siemens AG, Europe’s biggest engineering company, made 21.3% of its revenue from the U.S. in fiscal year 2012 and is among companies that anticipate further growth in the economy.
“A manufacturing renaissance is what is talk of town in the U.S.,” Siegfried Russwurm, head of Siemens’ industry division, said in an April 11 industry teleconference. “In the long run, we see a good business climate there, although currently it is a little bit bumpy.”
The economy is projected to grow at a 1.5% annual rate in the second quarter after an estimated 3% pace in the first three months of the year, according to the median forecast in a Bloomberg survey of economists from April 5 to April 9.
Part of the reason for the projected second-quarter slowdown is an increase in the levy used to finance Social Security, which returned to 6.2% from 4.2%. A worker earning $50,000 a year is taking home about $83 less a month because of the higher tax.
Fed policy makers yesterday said the U.S. expansion remained “moderate.” Household spending, they said in the Beige Book business survey, “grew modestly” as some sales were restrained by the tax increase and higher fuel costs.
At the same time, stocks climbed to all-time highs this month. Through yesterday, the S&P 500 gained 8.8% this year.
Higher home prices have also boosted household wealth. Property values rose 10.2% in the 12 months through February, the biggest gain in almost seven years, according to Irvine, California-based CoreLogic Inc.