Leading Economic Indicators Up 2nd Straight Month

The Conference Board, New York, said its Leading Economic Index increased by 0.1 percent in October to 124.5, following an 0.2 percent increase in September and an 0.2 percent decline in August.

The Coincident Economic Index increased by 0.1 percent in October to 114.3, following an 0.1 percent increase in September and an 0.2 percent increase in August. The Lagging Economic Index increased by 0.2 percent in October to 122.9, following an 0.2 percent increase in September and an 0.3 percent increase in August.

“Although its six-month growth rate has moderated, the index still suggests that the economy will continue expanding into early 2017,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research with The Conference Board. “The interest rate spread and average weekly hours were the main drivers of October’s improvement, helping to offset some of the weaknesses in claims for unemployment insurance and new orders.”

Tim Quinlan, economist with Wells Fargo Securities, Charlotte, N.C., said weakness in unemployment claims and new orders were offset by strong gains in the interest rate spread and average weekly hours.

“Strength in manufacturing hours worked and the interest rate spread buoyed the overall index to the positive, despite four categories in contractionary territory,” Quinlan said. “Non-defense capital goods orders (ex-aircraft) also helped lift the headline figure.”