http://www.bloomberg.com/apps/news?pid=20601087&sid=a2Gb0BDuDuA0&refer=home Leading Economic Indicators in U.S. Probably Fell in February By Courtney Schlisserman March 20 (Bloomberg) -- The index of U.S. leading economic indicators fell for a fifth month in February, reflecting mounting signs that a recession has begun, economists said before a report today. The Conference Board's gauge, which points to the direction of the economy over the next three to six months, fell 0.3 percent last month, according to the median forecast in a Bloomberg News survey. The last time the index dropped for as many months was in 1990, when the economy was shrinking. The leading index dropped as building permits, stock prices and consumer sentiment sank and first-time claims for jobless benefits jumped. Federal Reserve policy makers this week said risks to growth remain even after lowering the benchmark interest rate and making billions of dollars available to banks and securities firms to try to stabilize financial markets. ``A losing streak of five months is usually reserved for recessionary periods,'' said Jonathan Basile, an economist at Credit Suisse Holdings in New York. ``Once the labor market cracks, like it did last month, it shows the cycle is starting to turn down.'' The Conference Board, a New York-based non-profit research group, is scheduled to issue the report at 10 a.m. local time. The 58 estimates in the Bloomberg News survey ranged from a 0.7 percent decline to an increase of 0.2 percent. Reports so far this month signal the leading index will keep falling. A report from the Labor Department due at 8:30 a.m. in Washington is forecast to show that initial jobless claims rose to 360,000 last week, according to the median survey projection. Rising Claims Applications for unemployment benefits last month averaged 359,200, compared with 326,500 in January, according to Labor Department figures. A 10:00 a.m. report from the Fed Bank of Philadelphia is forecast to show manufacturing in the region contracted for a fourth month in March. Seven of the 10 components of the leading index are known ahead of time: stock prices, jobless claims, building permits, consumer expectations, the yield curve, supplier delivery times and factory hours. The Conference Board estimates the remaining three: new orders for consumer goods, new orders for non-defense capital goods and the money supply. Building permits for February fell 7.8 percent to an annual pace of 707,000, the lowest level in more than 16 years, the Commerce Department said on March 18. The Reuters/University of Michigan index of consumer expectations dropped to the lowest level since 1992 last month and a preliminary reading for March, issued last week, showed the measure is still declining. Spending Cools Americans are spending less as pessimism grows. AnnTaylor Stores Corp., the clothing retailer geared toward women ages 25 to 55, last week reported a fourth-quarter loss and said same- store sales may decline in 2008. The deteriorating economy had a ``major impact'' on store traffic, Chief Executive Officer Kay Krill said in a March 14 conference call. ``Downside risks to the economy remain,'' Fed policy makers said in a March 18 statement announcing the central bank lowered its target for the benchmark rate by three-quarters of a point to 2.25 percent. The Fed has cut the rate by three percentage points since September. On March 16, the central bank also lowered the rate on direct loans to banks and said it will provide up to $30 billion to JPMorgan Chase & Co. to help finance the purchase of Bear Stearns Cos. after a run on the fifth-largest U.S. securities dealer. More Funding Less than a week earlier, the Fed said it would make up to $200 billion in Treasuries available through weekly auctions in exchange for other securities that for the first time will include those backed by mortgages issued by private lenders. Companies are counting on gains overseas as the U.S. economy slows. General Electric Co. Chief Executive Officer Jeffrey Immelt told investors on March 13 that demand for the company's products from infrastructure projects and growth in Europe, Asia and Africa is helping offset any drag from a slump in the U.S. ``I still believe in the strength of the global economy now, but the U.S. consumer is in a tougher patch,'' Immelt said in a forum on the company's Web site.