WASHINGTON - A KEY forward-looking economic index suggests no quick recovery for the recession-hit US economy, a business research group said on Thursday.

The Conference Board reported that its composite index of leading economic indicators declined 0.4 per cent in November, following a 0.9 per cent drop in October, and no change in September.

The index is designed to provide clues on economic trends in the coming months.

'The economy has been in recession for a year and the latest indicator data show no sign of improvement in the first months of 2009,' said Mr Ken Goldstein, an economist with The Conference Board, a New York based business research firm.

He said that an intense housing downturn, set to begin its fourth year, and a severe financial crisis with nearly frozen credit markets 'have sharply lowered consumer and business expectations'.

Only four of the 10 indicators that make up the board's leading index were on positive territory - money supply, the interest rate spread, manufacturers' new orders for non-defence capital goods, and manufacturers' new orders for consumer goods and materials.

The negative contributors included building permits, stock prices and average weekly initial claims for unemployment insurance and weekly manufacturing hours.

The board said earlier this week that the US economy could contract by more than four per cent for both the current quarter and the first quarter of 2009.

Despite significant downside risks, it said there was still a good chance the US economy would experience a modest recovery by the second half of 2009. -- AFP