The composite index of leading U.S. economic indicators declined 0.3% in August, following a revised 0.4% rise in July, says the U.S. Conference Board.

The index had risen for three straight months, through July. The Conference Board also reports that there was no change in the coincident index, after a 0.2% rise in July.

The lagging index fell 0.3% in August, following a 0.7% decline in July. The composite indexes and their components suggest weakening conditions in the U.S. economy going into the end of the third quarter, just prior to the attack on September 11.

“There was cautious optimism a month ago that manufacturing declines might have been bottoming out,” says Conference Board economist Ken Goldstein.

“Now, in the wake of the terrorist attacks, economic demand seems likely to slow. This would be especially reflected in the numbers on orders and housing permits, among other components in September. While the service economy was not as weak as manufacturing this summer, the travel, entertainment, and amusement sectors have weakened following the September 11 tragedies.”