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FORECASTING INDEX UP 1ST TIME THIS YEAR

The government's main forecasting gauge of future economic activity broke a four-month losing streak in June and rose for the first time this year.

The Commerce Department said Wednesday the Index of Leading Economic Indicators eked out a 0.2 percent gain in June.The modest improvement appears to be in line with other recent data and projections by analysts, who said the economy, after a very sluggish second quarter, is showing signs of recovery.

The index had declined 0.2 percent in May, 0.6 percent in April, 0.4 percent in March and 0.3 percent in February before making its June comeback. The four straight declines were the first since it fell for six straight months in the last recession in 1990 and early 1991.

The index was unchanged in January and had not increased since a 0.2 percent advance in December.

The government reported Friday that the economy almost came to a halt in the second quarter this year that ended June 30. In its weakest performance in nearly four years, the gross domestic product that measures all goods and services produced in the United States grew at a 0.5 percent annual rate in the spring.

But Wednesday, using a new system of calculating growth, the government said the economy actually contracted 0.2 percent in the second quarter. The new system is designed to be more accurate by giving greater weight to price changes that have occurred in recent years, particularly for high-tech equipment.

In Wednesday's report on leading indicators, nearly all of the 11 components rebounded. Eight components made positive contributions to the overall report, the first time that has happened in eight months.

The hints of economic recovery have not been well-received on Wall Street. The stock market faltered Tuesday after a robust economic report from the manufac- turing sector led to new doubts about the outlook for lower interest rates. Stocks followed the bond market's lead in losing ground.

The Federal Reserve, after doubling the rate banks charge each other for overnight loans over a one-year span, lowered the rate in July for the first time in nearly four years.

The series of rate increases pushed borrowing costs higher for millions of Americans, leading to a spending slowdown.

The Index of Leading Economic Indicators is aimed at predicting activity six to nine months down the road. Three straight moves in one direction are considered a good indicator of where the economy is headed.