July's decline was the second decrease in the index in the past three months. The index remained unchanged in June and fell 0.1 percent in May.

Based on the report, building permits, stock prices, and weekly initial claims of jobless benefit made very large negative contributions, more than offsetting positive factors from the interest rate spread and consumer expectations. The weaknesses among the leading indicators continue to be very widespread, the report said.

"The recent decline in gas prices isn't enough to overcome all the negative momentum that's been building up through the spring and summer," Labor Economist at the Conference Board Ken Goldstern said.

After stabilizing in March and April, the leading index has reverted to the downward trend that began in the middle of 2007. The index reflected an economy that's slowed to a crawl, with sustained increases in unemployment, and the risks for further economic weakening in the near term remained elevated, according to the report.

"A few months ago, there was some discussion about a second-half recovery. If there's a second-half recovery," predicted Goldstein, "it will be the second half of 2009."

Established in 1916, the US Conference Board is the world's preeminent business membership and research organization, best known for its monthly US Consumer Confidence Index and the Leading Economic Indicators.