General Financial News
Index suggests economic momentum is stalling
May 21, 2010 06:13 AM
Commodities investors may have reason to suspect that the economic recovery will be far more difficult than hoped, especially when it comes to areas like consumer spending.
One such indicator came from the Conference Board Leading Economic Index, which posted a 0.1 percent decline in April after rising 1.3 percent in March and 0.4 percent in February. This suggests that the economy could be poised to stall or hit a period of stagnation before continuing to move back upward.
For investors in a wide range of futures and commodities, consumer spending can help determine the demand for everything from livestock to the metals and other materials used in manufacturing and industrial processes around the world.
"These latest results suggest a recovery that will continue through the summer, although it could lose a little steam. The U.S. LEI declined slightly for the first time in more than a year, and its six-month growth rate has moderated since December. Meanwhile, the coincident index, a measure of current economic activity, has been improving since mid-2009," said Ken Goldstein, an economist at The Conference Board.
Prices for a variety of materials may also remain unpredictable amid ongoing debt worries in the European markets. 
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