The composite index of Leading Economic Indicators grew 0.4% in July following a revised 0.4% drop in June, originally reported as a 0.3% decrease, the Conference Board reported Friday.

The coincident index grew 0.3% in July after an unrevised 0.2% gain in June, while the lagging index rose 0.4% after a revised 0.1% climb in June, initially reported as a 0.2% rise.

The LEI stands at 95.8, the coincident index is at 105.1 and the lagging index is at 116.0 The LEI has a baseline of 100, which reflects the level in 2004.

Economists polled by Thomson Reuters predicted LEI would be up 0.1% in the month.

"The indicators point to slow growth through the end of 2012," said the Conference Board economist Ken Goldstein. "Lack of domestic demand remains a big issue. However, back-to-school sales are better than expected, suggesting that the consumer is starting to come back. Retail sales this time of year are often an indicator of how the holiday season will turn out."

"With this month's increase, the U.S. LEI returned to its May level," said the Conference Board Economist Ataman Ozyildirim. "The majority of its components improved, led by large contributions from housing permits and initial unemployment claims. The LEI's six-month growth rate seems to be stabilizing, pointing to a continuing but slow expansion in economic activity for the rest of the year. Meanwhile, the coincident economic index, a measure of current conditions, has been rising slowly but steadily, with all four components improving over the last six months."

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