Leading Indicators Drop (again)

October 20, 2005 11:33am by

The Leading Economic Indicators dropped 0.7% in September. The Conf Board blamed higher energy prices, declining consumer confidence and a rise in jobless claims for the index’ decline. Recall that the LEIs were recently revised to maintain a more positive bias.

The Conference Board blamed the decline on "the negative impact of the hurricanes and flooding, resulting in lost jobs and incomes, and lost output" and admitted that "we could be in for slower economic growth through the end of the year."

Only 4 of the 10 indicators that showed improvement: vendor performance, building permits, interest rate spread and stock prices.

Negatives: weekly initial jobless claims, Consumer expectations, real money supply, manufacturers’ new orders (nondefense capital goods), manufacturers’ new orders (consumer goods),and  materials  all weakened.

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Sources:
U.S. LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES FOR SEPTEMBER 2005
http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1
(See also PDF)

Leading Indicators Drop 0.7% Amid Increasing Energy Costs
DOW JONES NEWSWIRES
October 20, 2005 10:28 a.m.
http://online.wsj.com/article/SB112981122090274284.html

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  3. pjfny commented on Oct 20

    here is the opposite view on valuation:
    http://www.hussmanfunds.com/wmc/wmc051017.htm

    Also, if you took out the positive impact on the LEI of the yield curve adjustments recently made, it would be down even more…….stock prices (another positive in the sep LEI) has sofar reversed in oct….everything else equal, Oct LEI could be down further…..ignore several months of decline in LEI at your own peril!

  4. scorpio commented on Oct 20

    exactly. i’d say 3 of the 4 positives are due entirely to greenspan’s “measured” approach to hyper-inflation. remove that complacency and rates rise dramatically, spreads widen, stocks collapse

  5. None of Your Business commented on Oct 21

    Leading Indicators Drop

    The Leading Economic Indicators have Dropped again. This shouldnt be much of a suprise to those that follow the indicators on at least a semi-annual basis. The bond yeild is the warning bell signalling that keen investors are recognizing the…

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