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During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Bankruptcy Figures Edge Down


The number of bankruptcies, dominated by personal filings, fell by about 1 percent in the year ended June 30, with business bankruptcies falling almost 4 percent, the Administrative Office of the U.S. Courts said.

The drop, to 1.63 million from 1.65 million, is the first since 2000 for the 12-month period ending in June, the office said in a statement. Four years ago, in the same period, there were 1.27 million filings, the office said.

"Consumer bankruptcy filings appear to have turned a corner," said Samuel J. Gerdano, executive director of the Alexandria, Va.-based American Bankruptcy Institute, in a statement. "Improving economic conditions and low interest rates are permitting more families to clean up their household balance sheets."

Nonbusiness bankruptcies for the period fell from 1.61 million in 2003 to 1.59 million in 2004.

The drop may only reflect the period reported, said economist Lakshman Achuthan, managing director of Economic Cycle Research Institute in New York. "The pace of growth is throttling back," Achuthan said. "Some of the best news on the bankruptcy front may be behind us."

The cost of food and energy, including gasoline, and other "clouds on the horizon" may affect the filing rate, he said.

Filings under Chapter 11 of the federal bankruptcy law, which allows a business hampered by debt to keep running under court-supervision, rose 4.2 percent to 11,048, the report said. Chapter 7 cases, which provide for liquidation of a person's or firm's assets, rose 0.10 percent to 1.16 million.

Business bankruptcies of both kinds fell from 37,182 to 35,739, the office reported. The number of public companies filing for Chapter 11 protection during the period fell by about half, from 99 to 51, the Institute said, citing research by BankruptcyData.com, which tracks such data.