Economy to slow in coming months

NEW YORK - A gauge of future economic activity showed the U.S. economy will slow in coming months, reversing recent gains and suggesting higher gas prices and a sluggish construction industry are beginning to take their toll.

The Conference Board said Thursday its index of leading economic indicators dropped 0.5 percent, higher than the 0.1 decline analysts were expecting. The reading is designed to forecast economic activity over the next three to six months.

The increase almost reversed an amended 0.6 percent climb in March, which analysts say should relieve pressure on the Federal Reserve to raise interest rates.

The reading tracks 10 economic indicators. Two of those readings were positive in April: stock prices and real money supply.

The negative contributors, beginning with the largest, were building permits, weekly unemployment claims, manufacturers' new orders for non-defense capital goods, consumer expectations, vendor performance, average weekly manufacturing hours and interest rate spread.

With the latest decline, the cumulative change in the index over the past six months has dropped 0.2 percent.