NEW YORK - The composite index of Leading Economic Indicators gained 0.3% in October, its seventh straight gain, the Conference Board reported today.
LEI increased an unrevised 1.0% in September.
The coincident index was flat in October, after a revised 0.1% drop in September, originally reported as unchanged, while the lagging index fell 0.2% after a revised 0.5% decline in September, originally reported as a 0.3% drop.
The LEI stands at 103.8, the coincident index is 99.8 and the lagging index is at 108.9.
Economists polled by Thomson Reuters predicted LEI would be up 0.4% in the month.
“After half a year of consecutive increases, the month-to-month growth of the LEI is stabilizing and the gains continue to be broad-based,” according to the Conference Board Economist Ataman Ozyildirim. “Meanwhile, the coincident economic index has been essentially flat since June, after declining since November 2007. The composite indexes suggest the recovery is unfolding and economic activity should continue improving in the near term.”
“The data indicate that economic recovery is finally setting in,” the Conference Board Economist Ken Goldstein said, “We can expect slow growth through the first half of 2010. The pace of growth, however, will depend critically on how much demand picks up, and how soon.”
Six of the 10 indicators that comprise the LEI rose in October: interest rate spread, average weekly initial claims for unemployment insurance, stock prices, average weekly manufacturing hours, real money supply, and manufacturers' new orders for consumer goods and materials. Index of consumer expectations, building permits, index of supplier deliveries, and manufacturers' new orders for nondefense capital goods were negative in the month.
The coincident index saw personal income less transfer payments, industrial production, and manufacturing and trade sales rise in the month. The negative contributor was employees on non-agricultural payrolls.
The lagging index saw positives from change in CPI for services,] and change in labor costs per unit of output. Commercial and industrial loans outstanding, average duration of unemployment, the ratio of consumer installment credit to personal income, and the ratio of manufacturing and trade inventories to sales were negative. The average prime rate charged by banks was flat in the month.
