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Leading Economic Indicators Fall 0.2% in November

The composite index of Leading Economic Indicators slid 0.2% in November following a revised 0.3% gain in October, originally reported as a 0.2% increase, the Conference Board reported Thursday.

The coincident index grew 0.2% in November after an unrevised 0.1% climb in October, while the lagging index rose 0.4% after an unrevised 0.3% gain in October.

The LEI stands at 95.8, the coincident index is at 104.9 and the lagging index is at 117.8 The LEI has a baseline of 100, which reflects the level in 2004.

Economists polled by Thomson Reuters predicted LEI would be down 0.2% in the month.

"The indicators reflect an economy that remains weak in the face of strong domestic and international headwinds, as it faces a looming fiscal cliff," said the Conference Board economist Ken Goldstein. "Growth will likely be slow through the early months of 2013."

"The U.S. LEI decreased slightly in November, bringing its six-month growth rate to zero," said the Conference Board Economist Ataman Ozyildirim. "The LEI points to increasing risks of slowing economic activity in the near term, but the coincident economic index, measuring current conditions, continued to increase in November. Gains in the residential construction and financial components of the LEI have been roughly balanced with weak consumer expectations, manufacturing new orders and labor market indicators over the last six months."

Five of the 10 indicators that comprise the LEI rose in November: interest rate spread, building permits, Leading Credit Index (inverted), average weekly manufacturing hours, and manufacturers' new orders for consumer goods and materials. Average weekly initial claims for unemployment insurance (inverted), stock prices, ISM new orders index, manufacturers' new orders for nondefense capital goods excluding aircraft, and average consumer expectations for business conditions were negative.

The coincident index saw manufacturing and trade sales, industrial production, employees on nonagricultural payrolls, and personal income less transfer payments all rise in the month.

The lagging index saw positives from commercial and industrial loans outstanding, change in CPI for services, ratio of consumer installment credit outstanding to personal income, average duration of unemployment (inverted), and the ratio of manufacturing and trade inventories to sales. Change in index of labor cost per unit of output, manufacturing, was negative. The average prime rate charged by banks was flat in the month.

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