The fact that the government's chief forecasting gauge remained unchanged
in April does not necessarily mean the economy is cooling, a University of
Tennessee economist said Thursday.

The index of leading indicators matched the March figure, and

some analysts said that points to a slowdown in economic growth.

Dave Mandy, Ph.D, of UT Knoxville's Center for Business and

Economic Research, said the economy may indeed be slowing down but

that the April index is not evidence to support that conclusion.

Ô'There is simply no denying that the trend of recent months

is upward in the index,'' Mandy said. Ô'So we had a flat month in

April. That's something that could easily turn around next month.

It might be the beginning of a slowdown, but it's far too soon to

conclude that, based on just one month.''

Mandy said the index's 11 components were splitÐsome

improved, others not.

Ô'It would be nice to see the index going up continuously,

but these things go in fits and starts, and I don't think there's

much cause for concern at the moment,'' Mandy said.

The economy is not growing at the pace it did in the fourth

quarter of 1993, Mandy said.

Ô'But that's a positive thing, not a negative thing, because

the fourth quarter pace was so hectic that, if that continued,

we'd have serious inflation pressures before long. That was not a
sustainable rate of growth.

Ô'The 3 percent growth we saw in the first quarter of 1994 is

not too bad. That's a reasonable rate of growth. It's sustainable.

It'd be nice to see it a little higher, but if we could get 3

percent growth every quarter that would be a pretty healthy


The U.S. index of leading indicators, prior to April, had

improved seven of the last eight months.