A monthly indicator of future economic performance in the United States continues upward — suggesting the slow pace of growth could accelerate this spring.
The Conference Board reported that its Leading Economic Index (LEI) climbed to 111.3 in October, up a half a percentage point.
Based on revised information, the index has advanced 1.6 percent over the past six months with more widespread strength among the 10 components of the index.
Gross domestic product, the broad measure of all goods and services produced in the country, grew at an annual rate of 2 percent in the third quarter, slightly higher than the 1.7 percent growth in the second quarter.
“The economy is slow, but latest data on the U.S. LEI suggest that change may be around the corner,” said Ken Goldstein, an economist at the Conference Board, a business research and membership organization. “Expect modest holiday sales driven by steep discounting. But following a post-holiday lull, the indicators are suggesting a mild pickup this spring.”
Ataman Ozyildirim, another economist with the Conference Board, said the upward trend of the LEI suggests that modest economic expansion will continue in the near term. “The LEI’s growth has been slowing this year, but gains in the financial components helped its pickup in October.”
For October, six of the 10 components of the LEI advanced: average weekly manufacturing hours, building permits, consumer expectations, interest rate spread, real money supply and stock prices.
New orders for nondefense capital goods were down, as was vendor performance. Average weekly initial claims for unemployment insurance held steady, as did new orders for consumer goods and materials.
The Conference Board Coincident Economic Index, a measure of current economic conditions, edged up a tenth of a percent to 101. 5 in October following two months of no change.
Three of four indicators advanced: nonfarm payrolls, manufacturing and trade sales and personal income less transfer payments. Industrial production held steady.
The Lagging Economic Indicator also rose a tenth to 108.7 in October following a combined increase of six-tenths of a percent in September and August.
For October, three of seven indicators retreated, including outstanding commercial and industrial loans and change in the Consumer Price Index for services. Moreover, the average duration of unemployment increased.