An index forecasting economic conditions in the United States has edged up, signaling growth into early next year.
The Conference Board reported that its Leading Economic Index rose a tenth of a percent to 124.5 in October. The overall reading is based on the performance of 10 leading indicators
“The index still suggests that the economy will continue expanding into early 2017,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.
“The interest rate spread and average weekly hours were the main drivers of October’s improvement, helping to offset some of the weakness in claims for unemployment insurance and new orders.” Ozyildirim said.
Separate measures of current and past economic performance also increased in October, the Conference Board reported.
The Leading Economic Index has increased seven-tenths of a percent over the past six months, more than double the three-tenths of a percent gain during the previous six-month span. Strengths among the leading indicators remained slightly more widespread than weaknesses.
Gross domestic product, the broad measure of goods and services produced in the country, grew at an annual rate of 2.9 percent during the third quarter after increasing 1.4 percent in the second quarter.
For October, six of the 10 indicators used in the Leading Index advanced, including average weekly manufacturing hours, building permits, interest rate spread, a leading credit index and new orders for capital and consumer goods.
Consumer expectations for business conditions, a new orders index and stock prices declined. An increase in average weekly initial claims for unemployment insurance also pulled down the index.
The Coincident Economic Index, a measure of current performance, edged up a tenth of a point to 114.3. The index has increased eight-tenths of a percent over the past six months.
For October, all four indicators of the index advance: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, rose two-tenths of a percent to 122.9. The index has increased seven-tenths of a percent over the past three months.
For October, three of seven indicators of the index advanced, including commercial and industrial financing and consumer credit. A decrease in the average duration of unemployment also bolstered the index.
The cost of both labor and services declined. Inventories and the average prime rate charged by banks held steady.