Index of economic indicators up 0.3 percent, but still suggests weakened economy
Tuesday, November 20th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ An important gauge of future U.S. economic activity rose 0.3 percent in October, but still suggested that the Sept. 11 terrorist attacks would remain a drag on the economy.
The Conference Board said Tuesday its Index of Leading Economic Indicators edged up to 109.4 in October, following a 0.5 percent decline in September and a 0.1 percent drop in August.
The index indicates where the overall U.S. economy is headed in the next three to six months. It stood at 100 in 1996, its base year.
Analysts had been expecting no change for October.
Ken Goldstein, economist for the New York-based Conference Board, said the housing and labor sectors, two components of the index, continued to struggle in October. But that weakness was offset by a recent rise in stock prices and the Federal Reserve's interest rate cutting campaign, Goldstein said.
The central bank has cut rates 10 times this year to shore up the economy, and is expected to cut rates again when it meets next month. Even before the Sept. 11 terrorist attacks, the economy had been struggling, as stocks tumbled, layoffs mounted and corporate earnings sagged.
In a separate report released earlier Tuesday, the Commerce Department said the U.S. trade deficit narrowed by a record amount in September to $18.7 billion. Although the deficit in manufactured goods rose, it was offset by huge payments by foreign insurance companies due to the attacks.
The markets were lower following the release of the reports, with the Dow Jones industrial average down 32 points at 9,944 and the Nasdaq composite index off 8 points at 1,926.