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Wall Street Withers, Main Street Teeters

Written By Brian Hicks

Posted September 18, 2008

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Lost in all of the hub-bub this week about the financial collapse has been the data on what is going on in the real economy.

You know the one.

It’s where people who have jobs actually produce and buy things.

Unfortunately, the news on that front really isn’t much better. And while it’s not collapsing like Wall Street, Main Street is definitely starting to teeter.

Here’s the skinny this week’s other economic news from Bloomberg.

It’s in an article by Bob Willis and Shobhana Chandra entitled: U.S. Economy: Leading Indicators Decline More Than Forecast

“The U.S. economy was heading for a deeper slowdown than forecast even before this month’s collapse in financial markets, a gauge of its future performance showed.

The Conference Board’s index of leading indicators, which points to the direction of the economy over the next three to six months, fell 0.5 percent. Separately, the Labor Department reported that more Americans than forecast filed first-time claims for unemployment insurance last week because of the impact of Hurricane Gustav in Louisiana.

“The Wall Street crunch has definitely rolled over into Main Street,” said Lindsey Piegza, a market analyst at FTN Financial, which correctly forecast the decline in leading indicators. “It’s a very dismal picture all around.”

The leading-indicator index fell at a 2.1 percent annual pace over the past six months. A decline of around 4 percent to 4.5 percent at an annual pace is one signal a recession is imminent, according to the Conference Board. The gauge met that requirement in January, when it dropped at a 4.7 percent pace.

The New York-based private research group’s leading index was forecast to decline 0.2 percent, according to the median of 57 economists in a Bloomberg News survey.

Six of the 10 indicators in today’s report subtracted from the index, led by faster supplier deliveries to factories that signal fewer orders are coming in. A slump in building permits and a jump in first-time jobless claims also factored into the decline.”

“The economy right now is so slow that it doesn’t have much cushion for shocks,” Ken Goldstein, an economist at the Conference Board, said in a statement. “We may not see any signs of improvement until well into the second half of 2009.’