A government index which is posed to predict the behavior economy several months down the road declined in June for the second consecutive month.
But government officials said the turndown in the Commerce Department's index of leading indicators does not portend a serious weakening in the economy, but merely reflects a slight slowdown in the growth rate from the 7 per cent the economy registered during the first months of the year.
Treasury Secretary W. Micheal Blumenthal said at a St. Louis press conference that the 0.6 per cent decline in the index would be a cause for alarm only if it "translated itself into a substantial slowdown."
Blumenthal said there is no reason to change the administration's projection that economic growth - as measured by the so-called real gross national product - will be at a 5 per cent annual rate for the next 18 months, fast enough to continue to reduce unemployment although not as quickly as in early 1977.
Of the 10 statistics available to compute the preliminary index of leading economic indicators, six declined and four rose.
Maynard Comiez, a top Commerce Department economist, said most of the declined in the index was attributable to a fall in price of crude materials, mainly scrap metals and natural gas.
Comiez said it would be worrisome if other developments in the economy also signalled weakness, but they do not, he said.
If the decline in crude materials prices were factored out, Comiez said, the index would have been about level, "not a positive sign, but not a sign of serious weakening."
Comiez noted that the indexes are usually revised and that while it is unlikely that the 0.6 per cent decline in June will be revised to a rise, the 0.2 per cent May dip might well be changed to a positive number.
Even two or three months of small declines in the index do not necessarily mean that the economy will change markedly, Comiez continued.