The U.S. Leading Index, a key barometer of economic conditions, increased 0.5 percent in November, following a large gain in October, The Conference Board reported Thursday.

The leading index now stands at 138.8 (1996=100). Based on revised data, the index increased 1 percent in October and decreased 0.7 percent in September. During the six-month span through November, the leading index increased 1.7 percent, with eight out of 10 components advancing, according to The Conference Board, a nonprofit research and business group.

With November’s increase, the six-month growth rate of the leading index picked up to about a 3.4 percent annual rate, up from an average of about 1.9 percent (annual rate) in the first half of 2005, and strength among the leading indicators has been widespread since August.

The largest contributor to November’s gain was initial claims for unemployment insurance (inverted), which returned to levels seen before the hurricanes hit the gulf region, The Conference Board said.

The leading index has been fluctuating around a relatively flat trend since mid-2004, following a strong upward trend from mid-2003 to mid-2004. Despite the slowing growth of the leading index, the strengths and weaknesses were well balanced through mid-2005, and strength among the leading indicators has become somewhat more widespread in recent months. The Conference Board said it is too early to tell whether the slowdown in the leading index has ended, and the recent behavior of the leading index is still consistent with the economy continuing to expand moderately in the near term.

Seven of the 10 indicators that make up the leading index increased in November. The positive contributors — beginning with the largest positive contributor — were average weekly initial claims for unemployment insurance (inverted), real money supply, index of consumer expectations, stock prices, building permits, interest-rate spread, and manufacturers’ new orders for consumer goods and materials.

The negative contributors were vendor performance, average weekly manufacturing hours, and manufacturers’ new orders for nondefense capital goods.


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