Leading Indicators Show Slower Growth Ahead

Washington, DC, November 21, 2007--The Conference Board said that the U.S. leading index decreased 0.5%, the coincident index remained unchanged and the lagging index increased 0.3% in October.

The leading index decreased sharply in October, following a small increase in September. Most of the leading indicators contributed negatively to the index in October, led by large declines in housing permits, initial claims for unemployment insurance, and index of consumer expectations.

Stock prices, real money supply, and manufacturers' new orders for consumer goods and materials were the only components that contributed positively to the index this month.

The leading index has been essentially flat in 2007, continuing the yearlong pattern of alternating monthly increases and decreases, and it has gradually returned to its August 2006 level. Meanwhile, real GDP grew at a 3.9% annual rate in the third quarter, moderately stronger than the 2.2% average annual rate in the first half of the year

The behavior of the composite indexes so far continues to suggest that risks for economic weakness persist, but economic growth should continue in the near term, albeit at a slower pace, the board said.

The leading index decreased sharply in October, following a small increase in September. Most of the leading indicators contributed negatively to the index in October, led by large declines in housing permits, initial claims for unemployment insurance, and index of consumer expectations.

Stock prices, real money supply, and manufacturers' new orders for consumer goods and materials were the only components that contributed positively to the index this month.

The leading index has been essentially flat in 2007, continuing the yearlong pattern of alternating monthly increases and decreases, and it has gradually returned to its August 2006 level. Meanwhile, real GDP grew at a 3.9% annual rate in the third quarter, moderately stronger than the 2.2% average annual rate in the first half of the year

The behavior of the composite indexes so far continues to suggest that risks for economic weakness persist, but economic growth should continue in the near term, albeit at a slower pace, the board said.