WASHINGTON (MarketWatch) -- The economy may weaken further this year, an economist with the Conference Board said Monday on a report that a key gauge of the economy dipped slightly in June.

The index of leading economic indicators, which attempts to forecast turning points in the economy, declined 0.1% in June. The result for May was revised to a decline of 0.2%, compared with a prior estimate of a 0.1% gain. Read related commentary.

"The domestic economy is showing no sign of strength," said Ken Goldstein, labor economist at the Conference Board. "The deep financial crisis, a prolonged, intense slump in housing, high gasoline and food prices, weak consumer confidence and a weak dollar are all combining to produce unrelenting downward pressure on economic activity."

Four of the 10 leading indicators that make up the leading index rose in June, with the largest positive contribution from building permits. The largest negative contribution came from the real money supply.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, noted that June's results were "saved from a much larger drop" due to a change in building permit rules for multifamily units in New York City that pushed up total starts.

"The data highlight the weakness of the economy in most areas," Shepherdson wrote.

The coincident index, which measures the current economy, rose 0.1% in June. In May, the index declined 0.1%. The four indicators in the coincident index are the same ones used by the National Bureau of Economic Research to judge whether the economy is in a recession. Industrial production was the largest positive contribution to the index, while employment continued to decline, according to the Conference Board.

On Sunday, Treasury Secretary Henry Paulson said current economic difficulties will take months to pass but added that turmoil in the banking sector is under control.

"This is a tough time," Paulson said in an interview on CBS's Face the Nation. "We're going to be in a period of slow growth for a while." See full story.