Leading Economic Indicators Unchanged

A yardstick of U.S. economic activity was unchanged in October, halting a decline that began in June and suggesting that the nation’s poor financial health may be stabilizing.

Separately, the Labor Department said Thursday that weekly jobless claims fell to their lowest level in four months.

The nation’s gradually improving employment outlook helped offset weaker consumer attitudes last month, leaving the Conference Board’s Index of Leading Economic Indicators flat at 111.4.

It fell a revised 0.4% in September, the New York-based group said Thursday.

The index measures where the overall economy is headed in the next three to six months. It stood at 100 in 1996, its base year.

Because analysts had expected the index to decline 0.1% last month, Thursday’s report was considered by economists to be relatively good news.

“It does look like the economy’s weakness is starting to ebb a bit,” said Douglas Parker, senior economist at BMO Nesbitt Burns Securities in Chicago. But, he added, “there are still a lot of mixed messages out there.”

For example, the housing market remains strong, despite a sharp decline last month, thanks in large part to low interest rates that also have spurred homeowners to refinance loans and free up cash to spend.

Yet the manufacturing sector continues to suffer from too much capacity and auto sales, which had been a clear area of strength over the last 18 months, appear to be cooling.

Six of the 10 indicators that make up the leading index improved in October, including unemployment claims and building permits, the Conference Board said.

Negative contributors were the index of consumer expectations and average weekly manufacturing hours.

On the labor front, new applications for unemployment insurance fell by a seasonally adjusted 25,000 to 376,000 for the workweek ended Nov. 16, the government reported. That left claims at their lowest level since the week ending July 20.

“The worst of the layoffs seems to be behind us,” said Lynn Reaser, chief economist at Banc of America Capital Management.