NEW YORK — A private-sector measure of the economy’s health showed the largest drop in a year, and while new jobless claims fell for the second straight week, they remain near the highest levels since 2002. The reports are the latest evidence that the languishing American economy remains stuck in low gear.
The New York-based Conference Board said Thursday that its monthly forecast of future economic activity fell 0.7 percent in July, far more than the consensus estimate of a 0.2 percent decline by Wall Street economists surveyed by Thomson/IFR.
The last time the index showed a drop this great was last August, when it fell by 1 percent.
The largest drag on the index was the decline in building permits, followed by dropping stock prices, rising unemployment claims, a tightened money supply and falling manufacturers’ orders for consumer goods. The index has slipped 0.9 percent for the six months ending in July.
“The economy is stuck somewhere between sluggish growth and recession,” said Mark Vitner, senior economist at Wachovia Corp.
Meanwhile, the Labor Department’s jobless claims data showed new filings dropped to 432,000, down by 13,000 from the previous week, a greater improvement than analysts expected. However, the four-week average climbed to 445,750, the highest level since November 2003.
“The labor market is soft but not collapsing,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pa.
