A closely-watched gauge of future U.S. economic activity fell sharply in July, dropping by the biggest amount in a year, a private business research organization reported Thursday. The Conference Board said its index of leading economic indicators fell 0.7 percent in July, the biggest drop since a 1 percent decline last August. Analysts had expected a much smaller 0.2 percent drop in July. In July, the largest drag on the leading indicators was the decline in building permits, followed by falling stock prices, rising unemployment claims, a tightened money supply, and declining manufacturers' orders for consumer goods. In the last six months, the index has risen only once, by 0.1 percent in April, in a sign that the U.S. economy has been weak for most of 2008. The index has fallen 0.9 percent over the last six months. The Conference Board's coincident index, which measures current economic activity, rose 0.1 percent in July, while the lagging index, which measures past activity, jumped 0.4 percent.
