18 November 2011 16:58 [Source: ICIS news]
WASHINGTON (ICIS)--A key measure of ?xml:namespace>
The Conference Board, a 94-year-old business analysis group based in
The LEI represents a cumulative measure of 10 different business and economic gauges, such as manufacturers’ new orders, residential building permits, interest rates and consumer sentiment, among others.
The index has been on a modest but nonetheless upward trend over the past 12 months, the board said, with narrow gains such as the 0.1% advance in September and the 0.3% increase in August.
The stronger 0.9% gain in October suggests that the mediocre
“The LEI is pointing to continued growth this winter, possibly even gaining a little momentum by spring,” said Ken Goldstein, an economist at the Conference Board.
Ataman Ozyildirim, another board economist, said “The October rebound of the LEI – largely due to the sharp pick-up in housing permits – suggests that the risk of an economic downturn has receded”.
“Improving consumer expectations, stock markets and labour market indicators also contributed to this month’s gain in the LEI as did the continuing positive contributions from the interest rate spread,” Ozyildirim added.
Goldstein took particular note of the improvement in consumer expectations, which rose to 51.8% in October from September’s 49.4% and the 47.4% reading in August.
“The lack of confidence has been the biggest obstacle in generating forward momentum, domestically or globally,” Goldstein said, adding: “As long as it lasts, there is a glimmer of hope.”
The board said there were improvements in nine of the ten indicators that make up the LEI - building permits, the interest rate spread, gains in weekly manufacturing hours, stock prices, the money supply, consumer expectations, new orders for both consumer products and capital goods and lower claims for unemployment insurance (an inverse contributor).
Only vendor performance showed a narrow decline of one-tenth of a percentage point in October from September.
The index now stands at 117.4. It is measured against the baseline of 100 set by the board in 2004.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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