Leading Indicators Fall in October

N E W  Y O R K, Dec. 4 -- A key gauge of future economic activity fell 0.2percent in October, suggesting further slowing for the U.S. economyin the new year.

The Conference Board said its Composite Index of LeadingEconomic Indicators declined to 105.5 in October after registeringno change in September and dropping 0.1 percent in August.October’s fall was slightly more than the 0.1 percent analysts had anticipated.

The index is watched closely because it gives an indicationwhere the overall U.S. economy is headed in the next three to sixmonths.

A related index, which measures current or coincident economicactivity, fell 0.1 percent in October — the first decline in 13months, the New York-based business group said.

Board StatementKen Goldstein, the board’s chief economist, noted that since thestart of 2000, the leading indicators have declined in five monthsand been flat in four.

“To be sure, this series has been signaling and continues topoint toward a cooling of still-strong economic conditions,”Goldstein said in a statement.

The latest Conference Board report said that six of the 10indicators that make up the leading index declined in October:manufacturers’ new orders for consumer goods, stock prices,manufacturers’ new orders for nondefense capital goods, consumerexpectations, initial claims for unemployment insurance and thespread in interest rates.

The index of lagging indicators was unchanged in October at105.6, the board said.

All the indexes use a base of 100 established in 1996.

U.S. economic growth slowed markedly in the July-Septemberquarter, with the nation’s gross domestic product expanding at anannual rate of 2.4 percent, down from 5.6 percent in the springquarter. GDP is a measure of the nation’s total output of goods andservices.

New-Home Sales Fall In further economic news, sales of new homes moderated in October aftersurging the month before, further evidence that economic growth isslowing to a more sustainable pace.