U.S. economic growth may slow in coming months as lending institutions tighten their rules, a research group said Thursday.The Conference Board said its index of leading economic indicators dropped a sharp 0.6 percent in August, slightly higher than the 0.5 percent fall analysts were expecting. The drop came after a revised 0.7 rise in July. While the index has jumped up and down in recent months, the cumulative change in the index over the past six months has increased 0.5 percent.Aaron Smith, a senior economist, told the Associated Press that the latest 0.7 drop in the leading economic indicators index is “an ugly number.”But, he added, it may simply reflect the effects of a tighter credit market in August and could rebound after the Federal Reserve's Thuesday decision to cut a key interest rate by a half point. The Conference Board report tracks 10 economic indicators. Only one of those indicators, real money supply, advanced in August.The negative components, starting with the largest, were consumer expectations, unemployment claims, stock prices, building permits, vendor performance, manufacturers' new orders for non-defense capital goods, interest rate spread, and manufacturers' new orders for consumer goods.Weekly manufacturing hours held steady.The report is designed to forecast economic activity over the next three to six months.The index rose a revised 0.7 percent in July, after slipping 0.1 percent in June.
