Leading economic indicators

More evidence of a less than vigorous recovery for the remainder of this year is apparent in the recent performance of The Conference Board's Index of Economic Indicators, which fell in April after being flat in February and March. The sluggish performance is probably the major reason the National Bureau of Economic Research has not declared the recession over.

Consumer confidence

Consumer confidence resumed growth in May after retreating in April, according to The Conference Board. The improvement centered on consumers' confidence in the present situation. A slight drop occurred in their expectations for the near future. Weakness in the labor markets and a faltering stock market are making consumers more cautious about the economy's future.

Building materials prices

Rising energy costs helped drive the U.S. Department of Labor's Materials and Components for Construction Index up 0.7%. Products with an oil base or with energy intensive production costs account for most of the increase. Lumber, however, once again retreated despite the United States' 29% duty on Canadian softwood imports.

Second mortgage interest rates

Homeowners considering remodeling projects are able to take advantage of second mortgage interest rates that dropped back below 6% again. The 5.94% rate at the end of May was the lowest level since mid-November of last year. There is little pressure to increase interest rates because the economic recovery is very mild.

Disposable income

Another sign that growth in the economy is moderating from the very high level is the performance in after tax per capita personal incomes in April. A negligible increase in disposable per capita income meant a 2.1% decline in the inflation-adjusted annual rate, according to the U.S. Department of Labor.