The U.S. leading index, a key barometer of economic conditions, declined for the fourth consecutive month in September, The Conference Board reported this week.

The leading index now stands at 115.6 (1996=100). Based on revised data, this index decreased 0.1 percent in September and decreased 0.3 percent in August. During the six-month span through September, the leading index decreased 0.2 percent, with three out of ten components advancing.

The Conference Board said the weakness in the last four months has become more widespread. However, these declines in the leading index have not been large enough nor have they persisted long enough to signal an end to the current economic expansion.

The coincident index, an index of current economic activity, increased again in September and its growth continues to be widespread. Real GDP growth slowed to a 3.3 percent annual rate in the second quarter, but appears to have picked up again in the third quarter.

While the leading index is not yet signaling a downturn, the growth rate of the leading index has slowed below its long-term trend growth rate, which is consistent with real GDP continuing to grow in the near term, but more slowly than its long-term trend rate.

Four of the 10 leading indicators that make up the leading index increased in September. The positive contributors were real money supply, stock prices, manufacturers’ new orders for non-defense capital goods and building permits. The negative contributors were vendor performance, interest rate spread, average weekly initial claims for unemployment insurance, average weekly manufacturing hours and manufacturers’ new orders for consumer goods and materials.

The index of consumer expectations held steady in September.


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