The Conference Board announced Thursday that the U.S. leading index slipped 0.4% in February for the first time since September 2002.

The board said uncertainty over war in Iraq, as well as severe winter weather in February, is reflected in the widespread weakness, particularly in stock prices, consumer expectations, and the labor market.

More generally, the leading index has been fluctuating around a flat trend over the past 15 months with a balance between rising and falling components. The index fell in the third quarter of 2002, rose in the fourth quarter, and is now declining again in the first quarter.

The board reported that the coincident index held steady during February, while the lagging index dipped 0.1%.

Six of the ten indicators that make up the leading index decreased in February. The negative contributors to the index were stock prices, average weekly initial claims for unemployment insurance, index of consumer expectations, interest rate spread, manufacturers’ new orders for consumer goods and materials, and manufacturers’ new orders for nondefense capital goods. The positive contributors were real money supply, vendor performance, and building permits. Average weekly manufacturing hours held steady in February.

“February’s slide now marks the first decline for the index since September 2002 (January’s data was revised up to 0.2% from -0.1%) and suggests that a full-blown U.S. economic recovery will not be taking off any time soon,” says RBC Financal Group. “However, February’s results are not very surprising given the weight of geopolitical concerns that the economy was forced to deal with and since some, but not all, of these concerns have began to recently lift, a better performance should be expected for March.”

The next leading indicator release is scheduled for April 21, 2003.