Leading indicators down in April

WASHINGTON -- An important gauge of the country's future economic activity fell in April, suggesting slower growth ahead.

The Conference Board, a private research group, reported yesterday that its Index of Leading Economic Indicators fell 0.1 percent to 138.9 last month. Economists were predicting a small rise. In March the index climbed 0.4 percent to 139.

The index is closely watched because it predicts economic activity over the next three months to six months.

Economists said the slide reinforces the Federal Reserve's forecast that growth, which has been brisk, probably will moderate to a more sustainable pace.

The economy in the first quarter of this year grew at a 4.8 percent pace, the fastest in 2.5 years. Analysts expect growth will slow about 3 percent to 3.5 percent in the second and third quarters -- a still healthy mark.

''The index is flashing not a recession but a slowing in growth, which is a welcome sign. Unfortunately, we are not seeing an accompanying moderation in inflation yet," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

On Wall Street, investors could not shake Wednesday's inflation scare, which sent the Dow industrials on their biggest one-day drop in three years. The Dow yesterday fell 77.32 points to 11,128.29.

In a separate report, the Labor Department said the number of people signing up for those benefits rose sharply last week mainly due to a partial government shutdown in Puerto Rico. New applications for unemployment insurance shot up by a seasonally adjusted 42,000 to 367,000 for the week ended May 13, the highest level since October.