Leading Economic Indicators Drop
The leading indicators index (LEI) — a forward-looking gauge of business activity in the United States economy — slowed in June, falling 0.2 percent to 109.8 following a 0.5 percent gain in May and a 0.1 percent drop in April, according to The Conference Board last week. The June decline indicates that growth slowed in the first half of 2010 versus the second half of 2009 and is likely to remain sluggish in the next quarter as well.

"The indicators point to slower growth through the fall," Ken Goldstein, an economist at The Conference Board, said in an announcement of the findings. "Two trends will have a direct impact on the pace of economic expansion. First, improvement in the industrial core of the economy will moderate as inventory rebuilding slows. Second, improvement in the service sector has been relatively slow, with little indication that it will pick up momentum."

Despite the slowdown, five of the 10 major indicators showed gains in June, MarketWatch reports. In addition to the interest rate spread, there were increases in the real money supply, building permits, the index of consumer expectations and manufacturers' new orders for consumer goods and materials.

Among the negative indicators, average weekly manufacturing hours had the largest decline, followed by supplier deliveries, stock prices and average weekly claims for unemployment insurance.

Although the LEI has contracted two of the previous three months, it remains 4.5 percent above its pre-recession peak.

2010 World Trade Forecast Revised Upward
The World Trade Organization (WTO) last week raised its forecast for global trade growth, in volume terms, to 10 percent this year, up from an estimated 9.5 percent in March. The WTO's director general said that even this increase might yet "turn out to be too low."

"Trade is picking up as vigorously as it decreased in 2009," WTO Director General Pascal Lamy said last week, cautioning that the outlook for the second half of the year remained shaky.

"It will probably pick up 10 to 10-plus percent this year depending on what happens in the second half of the year," Reuters quotes Lamy.

In the WTO's annual trade report, Agence France-Presse says, the organization focused on natural resources trade, calling for greater global cooperation on such commerce and warning that a failure to work together could spark new tensions.

"I believe not only that there is room for mutually beneficial negotiating trade-offs that encompass natural resources trade, but also that a failure to address these issues could be a recipe for growing tension in international trade relations," Lamy said in a statement.

China Addresses National Energy Challenges
China has overtaken the U.S. as the world's largest energy user, according to preliminary data released by the International Energy Agency (IEA) last week. In 2009, China consumed 2.252 billion tons of oil-equivalent energy from sources including crude, coal, natural gas, nuclear power and renewable resources, about 4 percent more than the U.S., Bloomberg News reported Tuesday.

"For those who have been following energy consumption trends closely, this does not come as a surprise," the IEA said in a statement last week. "What is more important is the phenomenal growth in demand that has taken place in China over the last decade; also prospects for future growth still remain incredibly strong."

Since 2000, China's energy demand has doubled. While the country increases its use of fossil fuels to meet future needs, it is also boosting renewable energy projects.

China "may spend about 5 trillion yuan ($738 billion) in the next decade developing cleaner sources of energy to reduce emissions from burning oil and coal," according to a separate Bloomberg News report, citing a government official. The government will submit plans to develop cleaner energy, including nuclear power and gas from unconventional sources, from 2011 to 2020 to the State Council, or Cabinet, for approval.

The country will need "between 500 billion and 600 billion yuan annually to develop energy-conservation and low-carbon technologies," according to a major report from the Chinese government last year. Earlier this month, Bloomberg New Energy Finance said China attracted $11.5 billion of asset financing in clean-energy technology in the second quarter, more than Europe and the U.S. combined.

New Jobless Claims Soar
New initial jobless claims rose in the latest week reported, according to the U.S. Department of Labor. Seasonally adjusted unemployment claims for the week ending July 17 reached a total of 464,000, a 37,000 increase from the previous week's revised total of 427,000 and a further sign of a weaker-than-expected recovery for the second half of 2010.

Fluctuating jobless-claims numbers in recent weeks were attributed largely to seasonal factors, such as industrial plants and other businesses closing for the summer, but experts say these temporary adjustments cannot account for the latest increase.

"Normally in July, claims tend to rise as factories shut down for part of the summer for annual retooling," the Wall Street Journal reports. "But this year, General Motors Co. decided to keep most of its plants operating, and Labor Department economists said manufacturers in other industries also broke from the tradition as well."

According to the Washington Post's Political Economy blog, the latest jobless claims figures exceeded most expectations, and while jobless claims typically fall as new jobs are created, "in recent months that hasn't been the case as some companies have reduced staff while others have expanded in an uneven recovery."

Last week, Congress approved legislation to provide unemployment benefits for 2.5 million people after the last round of insurance extensions began phasing out in May, MarketWatch reports. The latest extension will provide retroactive payments for some benefits through the end of November. Overall, federal aid has extended unemployment insurance payouts up to 99 weeks in the hardest-hit states.