A key gauge of economic activity dropped last month after rising in March, New York-based Conference Board said today.

Suggesting that economic recovery is sluggish, the research firm reported its index of leading economic indicators declined 0.4% last month to 111.7 after rising 0.1% in March. Analysts had forecast a decrease, but by only 0.1%.

"The signal from the indicators is that the recovery is developing quite slowly," Conference Board economist Ken Goldstein said. "Despite the strong growth in gross domestic product in the first quarter, the recovery in the industrial core remains weak."

Layoffs and slower growth in wages has cut into consumers' income, Goldstein said. And rising energy costs and the completion of most mortgage refinancing could slow household purchases in coming months, he added.