- The Washington Times - Tuesday, October 22, 2002

NEW YORK (AP) September's faltering stock market and increasing unemployment claims dragged down a widely watched gauge of U.S. economic prospects, a research group said yesterday.
It was the fourth consecutive monthly decline, but economists downplayed the possibility that it portended a second recession in as many years.
The Conference Board reported that its Index of Leading Economic Indicators fell 0.2 percent, matching Wall Street expectations.
The leading index, which attempts to predict the strength of the economy about six months ahead, stood at 111.6 in September. It stood at 100 in 1996, its base year.
Stuart G. Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, said the decline would "make some people nervous," but there was no real reason to conclude that the economy would go into a "double-dip" recession.
The index was affected mainly by the depressed stock market, which is not necessarily an accurate predictor of the economy, Mr. Hoffman said.
The economy shrank for the first three quarters of last year, meeting the measure of a recession, which is at least two straight quarters of decline.
After a strong showing at the beginning of this year, economic growth slowed in the second quarter to just 1.3 percent, raising fears of second recession.
Since then, various measures have given contradicting snapshots of the economy, painting an overall picture of a weak and uncertain recovery.
"We're in a volatile period, but the underlying economy is still doing better than it was a year ago," said Gary Thayer, chief economist at A.G. Edwards & Sons Inc. in St. Louis.
He cited as positive news the Conference Board's decision to revise the leading indicators for July and August upward. The group had said the index declined 0.4 percent and 0.2 percent in those months, respectively, but updated those numbers to declines of 0.2 percent and 0.1 percent.
Also, the coincident index, which measures the current economy, held steady in September at 115.1, buoyed by small gains in personal incomes and sales.
The Conference Board is a nonprofit business research organization based in New York.

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