- The Washington Times - Thursday, October 19, 2006


A modest increase in consumer expectations helped boost a closely watched gauge of future economic activity in September, an industry-backed research group said yesterday.

The Conference Board said its Index of Leading Economic Indicators edged up 0.1 percent to 137.7 last month. The index had slipped 0.3 percent in July and 0.2 percent in August. The September increase fell short of analysts’ expectations of a 0.3 percent rise.

The index is designed to predict economic activity three to six months in the future.

The small gain in September fit with economists’ expectations that growth will slow in the coming months.

“The leading index started to point to slower growth ahead a year ago; that’s where we are now,” said Ken Goldstein, the Conference Board’s labor economist.

“Growth, but slower growth,” he said. “And the latest readings tell us that’s where we’re going to be for a while,” possibly into the first half of 2007.

Over the past six months, the index has fallen 0.9 percent. It has declined in five of the past eight months, with areas of weakness including manufacturers’ orders for goods and housing permits as the housing market has softened.

Americans have been hit with a declining housing market, but also have seen relief in their fuel bills recently as crude-oil prices have fallen from record highs.

The government reported yesterday that consumer prices fell by the largest amount in 10 months in September, easing worries that inflation was about to get out of control. Core inflation, which excludes energy and food, edged up by a moderate 0.2 percent, the third straight month of modest gains following higher readings earlier in the year.

Investors think the inflation indicator will convince the Federal Reserve that its goal of slowing the economy enough to cool inflation pressures is working and officials won’t feel the need to boost rates further either at next week’s meeting or for the rest of the year.

The release of the leading indicators report followed a government report earlier yesterday that the number of newly laid-off workers filing for unemployment benefits dropped sharply last week to the lowest level in nearly three months. The Labor Department said that 299,000 people filed claims for jobless benefits, a decline of 10,000 from the benefit applications filed the previous week.

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