May 17 (Reuters) - The Conference Board on Friday said its U.S. Leading Economic Index fell in April, driven by a deterioration in consumers' outlook on business conditions, weaker new orders, a negative yield spread, and a drop in new building permits, pointing to weaker economic growth ahead.
The business research group's index declined 0.6% in April to 101.8. A Reuters poll of economists had expected a decline of 0.3%. Stock prices were also a drag on the index for the first time since October.
The reading comes three months after the organization abandoned its prediction that the economy would fall into a recession.
"While the LEI's six-month and annual growth rates no longer signal a forthcoming recession, they still point to serious headwinds to growth ahead," said Justyna Zabinska-La Monica, senior manager for Business Cycle Indicators, in a statement.
The organization cited still-elevated inflation, high interest rates, rising household debt and waning pandemic savings as factors that are set to weigh on the economy this year as it forecast real GDP growth to slow to less than 1% over the second to third quarter period.
An Atlanta Fed model tracking U.S. economic growth currently sees second-quarter output rising at a 3.6% annualized rate, up from 1.6% in the first quarter of 2024. The Fed views a 1.8% annualize rate as the economy's long-term potential.
(Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)
