WASHINGTON – A measure of U.S. economic activity designed to give signals about the future posted a solid gain in September, rebounding after a dip in August. The index is still signalling weak growth, however.
The Conference Board said Thursday that its index of leading indicators rose 0.6 per cent in September after falling 0.4 per cent in August and rising 0.4 per cent in July. The previous months were revised down slightly.
The strength in September came from a big jump in applications for building permits, which the government reported Wednesday had climbed to a four-year high that month.
Other areas of strength came from low interest rates and rising stock prices. In all, six of the 10 indicators that make up the index showed strength. The major areas of weakness came from a decline in the Institute for Supply Management’s new orders index and in consumer confidence.
The overall economy grew at an annual rate of just 1.3 per cent in the July-September quarter and many analysts believe growth in the second half of this year will continue to muddle along at an annual rate of between 1.5 per cent and 2 per cent.
However, there have been some recent signs of strength. Retail sales jumped 1.1 per cent in September and the gains in August and September were the strongest in two years. Also, housing construction in September climbed to the highest level in four years.