Leading Indicators Index Shows Economy to Keep Growing
The index of U.S. leading indicators accelerated in September, signaling the world’s largest economy will keep expanding into 2015.
The Conference Board’s gauge of the outlook for the next three to six months climbed 0.8% after no change in August, the New York-based group said today. The median forecast of 45 economists surveyed by Bloomberg News called for a rise of 0.7%.
“The economy is faring quite well,” Millan Mulraine, deputy head of U.S. research and strategy at TD Securities LLC in New York, said before the report. “Given the strong fundamentals, the U.S. should be able to weather any global downturn.”
Estimates in the Bloomberg survey ranged from gains of 0.2% to 0.9%, after a previously reported 0.2% rise in August.
Nine of the 10 indicators in the leading index contributed to the increase, today’s report showed. They included fewer jobless claims, more factory orders, and the interest-rate spread between the federal funds rate and 10-year Treasury notes.
Increases in building permits and consumer-goods orders also helped propel the LEI last month. Permits for future residential projects rose in September to a 1.02 million annualized pace, pointing to a sustained rate of construction. Housing starts also climbed last month.
In contrast to the U.S., concerns are mounting about global economic weakness. The International Monetary Fund cut its forecast for international growth in 2015 and said the euro area faces the risk of a recession. The Washington-based lender trimmed projections for emerging markets including Brazil and Russia, while raising them for the U.S.
“The financial markets are reflecting turmoil and unease, but the data on the leading indicators continue to suggest moderate growth in the short-term,” Ken Goldstein, economist at the Conference Board, said in a statement.
Households are getting relief as their fuel bills decline. Both West Texas Intermediate crude and Brent crude have plunged more than 20% from their June highs, meeting the common definition of a bear market.
