21 November 2007 17:49 [Source: ICIS news]
The New York City-based Conference Board, a 91-year-old business research group, takes a monthly measure of activity in 10 key economic sectors, including new manufacturing orders, stock, prices, unemployment claims and new home construction, among others.
The combined results of those measures make up the board’s leading indicators index, which stands at 136.9 for October, down from 137.6 registered for September, putting the index at the same level it held in August last year.
The leading indicators index is measured against a baseline level of 100 set in 1996.
“Most of the leading indicators contributed negatively to the index in October, led by large declines in housing permits, initial claims for unemployment insurance and the index of consumer expectations,” the board said.
However, the board noted that three of the 10 leading indicators had positive results in October, including manufacturers’ new orders for consumer goods and materials, an economic sector that is a key downstream consumer of chemicals and chemicals-based materials.
“The leading index has been essential flat in 2007,” the board said, “continuing the yearlong pattern of alternating monthly increases and decreases, and it has gradually returned to its August 2006 level.”
Even so, the board noted that real US GDP grew at a 3.9% annual rate in the third quarter, moderately stronger than the 2.2% average annual GDP rate shown in the first half of this year.
“The behaviour of the composite indexes so far continues to suggest that risks for economic weakness persist, but economic growth should continue in the near term, albeit at a slower pace,” the board added.
The Conference Board’s leading indicators index and other economic measures will be considered by the Federal Reserve Board when it meets on 11 December to decide whether to lower US interest rates still further.
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