WASHINGTON (AFP) - A closely watched index of future economic activity fell 0.3 percent in August, the third consecutive monthly decline, the Conference Board said.
The research firm's index of leading economic indicators, forecasting activity in the coming months, dipped to 115.7, a reading weaker than expected on Wall Street.
"The leading indicators continue to soften," said Conference Board economist Ken Goldstein. "There is concern about weak consumption and the pace of wage and salary increases."
Both consumers and businesses are showing caution, the economist said.
"Consumers worry about their wages and salaries, which could limit spending," said Goldstein. "Businesses worry about their ability to raise prices and to cover rising costs."
The leading index, a harbinger of activity in the coming months, had dropped 0.3 percent in July and 0.1 percent in June. On Wall Street, economist had expected on average a decline of 0.2 percent in August.
Two other readings released by the Conference Board were mixed. The so-called coincident index, a barometer of current economic activity, increased 0.2 percent in August, following a 0.2 percent increase in July.
The lagging index of past activity declined 0.1 percent in August, after increasing 0.6 percent in July.
The Conference Board said that the declines in the leading index are not deep enough to signal an end to the upward trend since March 2003. But it suggests slower growth ahead
"The slower recent growth rate of the leading index is consistent with real GDP (gross domestic product) continuing to increase, but at or slightly below its long-term trend," the board said.
Three of the ten indicators that make up the leading index increased in August -- manufacturers' new orders for consumer goods and materials, real money supply and average weekly initial claims for unemployment insurance.
But the improvement in those components was offset by factors including interest rate spread, building permits, index of consumer expectations, manufacturers' new orders for nondefense capital goods, overall retail sales, and stock prices.