A key indicator of US economic activity posted its largest drop since September 2001 in July, as stock market uncertainty, falling consumer confidence and revelations of corporate dishonesty dampened the outlook.
The Conference Board said its US index of leading economic indicators fell 0.4 per cent last month - the largest decline since a 0.6 per cent fall in the aftermath of the September 11th attacks on the United States that temporarily brought activity to a near-standstill.
The July fall, which fanned concerns about the halting US economic recovery, followed a revised 0.2 per cent drop in June. The June number had been initially reported as unchanged.
"The second consecutive decline in the leading indicators index raises fears about the current recovery," Mr Ken Goldstein, the board's chief economist, said in a statement. "Volatile financial markets, corporate scandals and sagging consumer expectations are trouble spots."
However, Mr Goldstein added, "latest evidence shows no significant weakening in the consumer markets, with home and car buying continuing to be strong."
Stock markets shrugged off today’s report, with the blue-chip Dow Jones industrial average adding 170 points, or more than 1.9 per cent, to trade around 8,948 early afternoon. Equities have been on an upward march recently, recovering from multi-year lows hit last month.