A composite index of ten economic indicators that should lead overall economic activity. This indicator was initially compiled by the Commerce Department but is now compiled and produced by The Conference Board. It has been revised many times in the past 30 years - particularly when it has not done a good job of predicting turning points. Why Investors Care
| Released on 11/20/08 For Oct 2008 | ||||||||||||
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Highlights
The fall in the stock market, declines in building permits and consumer expectations along with a quickening in delivery times all weighed on the index of leading economic indicators which dropped a very sharp 0.8 percent in October to indicate economic contraction in the months ahead. The biggest positive factor, reflecting central bank efforts to stimulate the banking system, was a rise in money supply. In a surprise, the index of coincident indicators, after falling sharply in the two prior months, rose 0.2 percent. But the gain in October was led by a jump in industrial production which was due in part to special factors. The coincident indicator aside, the text of the report warns that economic contraction may intensify through the winter.
The Conference Board's index of leading indicators unexpectedly rose 0.3 percent in September, but followed a very steep decline of 0.9 percent in August and a 0.7 percent drop in July. The largest factor by far adding to September's gain was the Fed's pumping up liquidity as the money supply component added 0.45 percentage points to the leading index's monthly change - meaning the overall index would have fallen 0.2 percent without the surge in money supply. There is a good chance the leading index will resume its fall in October, especially given the further weakening in stocks and decline in housing permits. The S&P 500 dropped 16.9 percent in October, month-end over month=end, while the initial estimate for housing permits fell 8.5 percent.
Leading indicators Consensus Forecast for October 08: -0.6 percent
Range: -1.2 to -0.2 percent
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