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U.S. Leading Economic Index Rebounds By 0.6% In September

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After reporting a drop by U.S. leading economic indicators in the month of August, the Conference Board released a report Thursday morning showing that its leading economic index rebounded by more than expected in September.

The Conference Board said its leading economic index rose by 0.6 percent in September following a revised 0.4 percent drop in August. Economists had expected the index to edge up by 0.2 percent compared to the 0.1 percent dip originally reported for the previous month.

Ataman Ozyildirim, an economist at the Conference Board, said, "The LEI has been signaling an economy that is fluctuating around a slow growth trend."

"The six-month growth rate has slowed substantially, but still remains in growth territory due to positive contributions from the housing and financial components," he added.

The rebound by the leading index reflected increases by six of the ten indicators that make up the index, including building permits, the interest rate spread, stock prices, and the Leading Credit Index.

Negative contributions from the ISM new orders index, average consumer expectations for business conditions, and average weekly jobless claims helped to limit the upside for the index.

The report also showed that the coincident economic index rose by 0.2 percent in September after coming in unchanged in August.

The modest increase by the coincident index reflected positive contributions from all four of the indicators that make up the index.

Additionally, the lagging economic index edged up by 0.1 percent in September following a 0.3 percent increase in August.

Positive contributions from the change in consumer prices for services and the ratio of consumer installment credit to personal income led to the modest increase by the lagging index.

Ken Goldstein, an economist at the Conference Board, said, "The single biggest challenge remains weak demand, domestically and globally."

"The struggle to regain firmer ground - in financial markets, international trade and global industrial output - continues because of weak consumer demand and a lack of more robust business investment," he added.

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