A private research group's gauge of future economic activity rose a slim 0.1 percent in January, significantly slower than in recent months as a measure of the housing market tumbled.
The rise in the Conference Board's index of leading economic indicators was the seventh consecutive monthly advance, but It was slower than a revised 0.8 percent increase in December and a 1.1 percent advance in November. Those had been the biggest increases since March.
The January increase was the slowest since a 0.1 percent rise in August.
The index can swing wildly from month to month. January's slowdown isn't necessarily a sign that economic growth will slacken over the next few months.
The main drag on the index was a more than 10 percent decline in building permits, partly due to a change in the building code in some big states that had sparked a rush in such applications in December.
The leading indicators began moving sharply higher last fall as the stock market rallied, consumers spent more, the manufacturing sector grew steadily and the jobless rate dropped.
Six of the 10 components in the index increased last month, led by a measure of interest rates that has historically pointed at a quickening economy and rising prices. That measure is the difference between 10-year Treasury yields and the overnight bank lending rate the Federal Reserve is keeping at zero. The gap between the two widened recently because of a sell-off in Treasurys, which means yields are rising. Investors are selling government debt in favor of stocks and other assets seen as riskier — but potentially offering better returns — as the economy improves.
Rising stock prices and consumer sentiment and measures related to the manufacturing sector also bolstered the index.
A plunge in building permits in January, weaker data related to jobs and an estimate of how much money is in the financial system weighed on the index in January.
But the index's building permit decline might not signal that the real estate market is worsening. Building permits are a signal of future construction. The decline last month was in part because upcoming regulatory changes in California, Pennsylvania and New York had caused an artificial spike in permits the previous month. Builders had rushed to file new permits before changes went into effect in 2011.
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