NEW YORK - The composite index of Leading Economic Indicators soared 0.9% in October, the Conference Board reported Friday.
The coincident index grew 0.2% in October after a revised flat September, while the lagging index rose 0.6% after a revised 0.1% increase in September.
LEI grew a revised 0.1% in September, originally reported as a 0.2% jump, the coincident index was originally reported up 0.1% and the lagging index was first reported 0.2% higher.
The LEI stands at 117.4, the coincident index is at 103.5 and the lagging index is at 110.9. The LEI has a baseline of 100, which reflects the level in 2004.
Economists polled by Thomson Reuters predicted LEI would be up 0.6% in the month.
“The LEI is pointing to continued growth this winter, possibly even gaining a little momentum by spring,” said the Conference Board economist Ken Goldstein. “The lack of confidence has been the biggest obstacle in generating forward momentum, domestically or globally. As long as it lasts, there is a glimmer of hope.”
“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,” according to the Conference Board Economist Ataman Ozyildirim. “Improving consumer expectations, stock markets, and labor market indicators also contributed to this month’s gain in the LEI as sis the continuing positive contributions from the interest rate spread. The CEI also rose somewhat, led by higher industrial production and employment.”
Nine of the 10 indicators that comprise the LEI rose in October: building permits, interest rate spread, average weekly manufacturing hours, stock prices, real money supply, average weekly initial claims for unemployment insurance, index of consumer expectations, manufacturers' new orders for consumer goods and materials and manufacturers' new orders for nondefense capital goods. Index of supplier deliveries was negative.
The coincident index saw industrial production, employees on nonagricultural payrolls, personal income less transfer payments, and manufacturing and trade sales rise in the month.
The lagging index saw positives from commercial and industrial loans outstanding, average duration of unemployment, and ratio of consumer installment credit outstanding to personal income. Change in labor cost per unit of output, and change in CPI for services, average prime rate charged by banks, and the ratio of manufacturing and trade inventories to sales were flat in the month.
