Pointing to modestly expanding economic activity in the near term, the Conference Board released a report on Wednesday showing that its index of leading economic indicators increased in line with economist estimates in the month of October.
The Conference Board said its leading economic index edged up by 0.2 percent in October following a downwardly revised 0.5 percent increase in September.
Economists had expected the index to rise by 0.2 percent compared to the 0.6 percent increase originally reported for the previous month.
Ken Goldstein, an economist at the Conference Board, said, "Based on current trends, the economy will continue to expand modestly through the early months of 2013."
"Hurricane Sandy, which is not yet fully reflected in the LEI, will likely adversely affect consumer spending and home building in the short-term, but it's too soon to gauge the net impact," he added. "In addition, the outcome of the fiscal cliff debates is another factor which could alter the outlook."
The modest increase by the leading economic index reflects positive contributions from four of the ten indicators that make up the index, including the interest rate spread, the Leading Credit Index, average weekly jobless claims, and manufacturers' new orders for non-defense capital goods excluding aircraft.
Meanwhile, negative contributions from building permits, average consumer expectations for business conditions, the ISM new orders index, and stock prices helped to limit the upside for the index.
The report also showed that the coincident economic index inched up by 0.1 percent in October following a 0.2 percent increase in September.
Positive contributions from manufacturing and trade sales, non-farm payroll employment, and personal income less transfer payments led to the modest increase by the index.
The Conference Board also said its lagging economic index rose by 0.3 percent in October after falling by 0.1 percent in September.
The rebound reflected positive contributions from commercial and industrial loans outstanding, the ratio of consumer installment credit to personal income, the change in consumer prices for services, and the ratio of manufacturing and trade inventories to sales.
Negative contributions from the change in unit labor costs, manufacturing and the average duration of unemployment limited the upside for the index.
by RTT Staff Writer
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