Plus: Leading Economic Indicators Fall, Jobless Claims Soar and Cyber Attacks on an Upswing.

Leading Economic Indicators Decline

The index of leading economic indicators for the United States edged downward in June, offsetting recent gains and signaling rising economic uncertainty. The Conference Board’s Leading Economic Index (LEI) for the U.S. fell 0.3 percent last month, following a 0.4 percent gain in May.

The LEI is a weighted gauge of 10 indicators designed to signal business cycle peaks and troughs and provides a short-term outlook for business conditions. Six of the 10 indicators that make up the index contracted in June, led by declines in overall manufacturing demand and consumer sentiment. The four positive contributors last month were: the interest-rate spread, weekly manufacturing hours, credit and new manufacturing orders for consumer goods and materials.

“The U.S. LEI declined in two of the last six months, and its six-month growth rate has eased in the last three months,” Ataman Ozyildirim, an economist at the Conference Board, said. “The strengths among the leading indicators have become less widespread as consumer expectations and manufacturing new orders offset gains in the financial, labor and construction-related components. Meanwhile, the coincident economic index, a measure of current economic conditions, has risen slowly but steadily in the last three months.”

Meanwhile, the Conference Board’s index of coincident indicators, which measures current economic activity, rose 0.2 percent in June, following a 0.2 percent increase in May.

“U.S. economic growth is cooling after the weakest quarter of hiring by companies in two years,” Bloomberg News notes. “Bernanke, responding to questions during a July 17 testimony to the Senate Banking Committee in Washington, said growth is slowing as business investment cools in response to the European crisis and the prospect of fiscal tightening in the U.S. At the same time, households are restraining spending as unemployment remains elevated and credit is hard to get.”

Jobless Claims Surge Upward

New initial jobless claims increased in the latest week reported, indicating that the labor market continues to struggle with volatility despite jobless claims hitting a four-year low two weeks ago. According to the U.S. Department of Labor, seasonally adjusted unemployment claims for the week ending July 14 rose by 34,000 to a total of 386,000, up from the previous week’s revised total of 352,000. The four-week moving average, which smoothes out short-term volatility, fell by 1,500 to 375,500.

“Every year, automakers shut down to reconfigure their machinery to make next year’s models — a phenomenon that typically happens in early July and results in temporary layoffs. The Labor Department tries to adjust for this factor but may have overcompensated this year,” CNN Money reports. “Stronger auto sales have led factories to either shorten or cancel shutdowns and make fewer of those furloughs. As a result, the initial jobless claims figures looked artificially low in early July, and may now be heading back toward a more normal path.”

The increase in unemployment claims came as a surprise, as economists polled by MarketWatch had forecast claims would rise to only 365,000. Jobless claims have exceeded 380,000 in nine of the past 15 weeks, reflecting a general slowdown in hiring. In June, the private sector added just 80,000 new jobs.

“On a potentially positive note, though, the four-week level of claims in the ‘survey’ period used to help calculate monthly job growth was 12,000 lower compared to the same period in June,” MarketWatch explains. “That might suggest hiring picked up slightly in July from June’s net increase of 80,000 jobs.”

Manufacturing, Energy to Drive U.S. Cities’ Growth

As the U.S. continues to recover from the recession, metropolitan areas will be critical to the nation’s economic expansion, with manufacturing and energy as key drivers of urban growth, according to a new report from the United States Conference of Mayors.

Prepared by IHS Global Insight, the study indicates that by the end of 2012, 300 of the country’s 363 metro areas will experience real economic growth (measured as “gross metro product”). Specifically, gains in energy and the resurgent manufacturing sector will provide expansion for Midwest industrial cities and metro areas that produce oil and natural gas.

“Since the end of the recession – during which inventories were short and payroll fell drastically – firms have called back workers and expanded operations as the recovering economy has demanded a greater supply of manufactured goods,” the report explains.

Examples reflecting the larger trend include two metro areas in Indiana: Elkhart-Goshen, which will expand its recreational vehicle manufacturing, and Columbus,  which will increase advanced manufacturing in automobile metals, molds and precision tools production.

The report also forecasts that U.S. metropolitan areas will experience considerable growth in international trade in the coming years, making the U.S. a net-positive exporter by 2020. However, mayors at a recent summer leadership meeting argued that failure to expand the country’s current infrastructure system will put the country’s global competitiveness in jeopardy.

Cybersecurity Attacks on the Rise, but Going Unreported

Cyber attacks are on the rise but remain underreported, weakening cybersecurity efforts across the U.S., a new study suggests. The Public-Private Information Sharing report from the Bipartisan Policy Center’s Cyber Security Task Force found that 50,000 cyber attacks on private and government networks were reported to the Department of Homeland Security between October 2011 and February 2012, but this number represents a small fraction of actual attacks.

The task force was headed by former National Security Agency and CIA chief General Michael Hayden and businessman Mortimer Zuckerman, who both called for better communication between affected organizations. “Real and perceived legal barriers stand in the way of robust cybersecurity information sharing between the government and private sector,” Hayden said in an announcement of the findings.

The study explained that companies may be cautious about reporting cybersecurity breaches due to the perceived fear of reputation damage or intellectual property leaks, according to Agence France-Presse.

“The cyber information that is shared between the government and private sector now is often either too late to be relevant, incomplete or in an unusable format,” Zuckerman added. “This report outlines a vision for real-time, automated information sharing in digital formats. During a major cyber incident, this is critical to developing a coordinated national response.”

Cybersecurity legislation has been routinely stalled in Congress, although a new compromise bill was recently introduced to the U.S. Senate. The legislation “would bolster cyber threat assessment and permit the government to share information with American business under certain conditions,” Reuters reports.