US leading index falls, UK GDP growth forecast and German producer price inflation rise

The US economy looks likely to slow, according to the Conference Board's leading index for the US.

The Conference Board announced today that the U.S. leading index decreased 0.2 percent, the coincident index increased 0.3 percent and the lagging index increased 0.1 percent in February...

The leading index now stands at 139.0 (1996=100). Based on revised data, this index increased 0.5 percent in January and increased 0.3 percent in December. During the six-month span through February, the leading index increased 1.5 percent, with eight out of ten components advancing (diffusion index, six-month span equals eighty percent).

No wonder Federal Reserve Chairman Ben Bernanke says that policy-makers need to tread cautiously.

On the other hand, economists are getting more optimistic on the UK economy. From Reuters:

Economists are becoming more optimistic about economic growth and less certain that the next move in interest rates will be a cut, a Reuters poll of 31 economists shows.

The median forecast in the survey, taken last week, showed the country's gross domestic product (GDP) growing 2.3 percent this year, up from a forecast of 2.1 percent in last month's poll, and above the 1.8 percent achieved in 2005.

The likelihood of an interest rate cut by the Bank of England looks even less after the recent reports of higher inflation expectations, strong growth in M4 and the continued rise in house prices in February even though mortgage lending growth slowed.

And speaking of prices, producer price inflation accelerated in Germany in February. From Bloomberg:

German producer-price inflation accelerated in February to the fastest pace in almost 24 years, led by a surge in energy costs.

Goods from plastics to newsprint were 5.9 percent more expensive in February than at the same time last year, the biggest increase since June 1982, the Federal Statistics Office in Wiesbaden said in a statement today. Economists expected a rate of 5.3 percent after 5.6 percent in January, the median of 29 estimates in a Bloomberg News survey showed. Producer prices rose 0.7 percent from a month ago.