Leading Economic Indicators Rise In October

The rise underway in long-term interest rates, as an indication of strength in borrowing demand, gave a big boost to the index of leading economic indicators which rose a very strong 0.6 percent in the October report. The rebound in the stock market and yesterday's gain for housing permits were also positives and point to rising strength for the economy.

This report had been dead flat since July and October's gain is a sudden indication of acceleration ahead. And though the gain is centered in interest rates where a counter-intuitive strain runs, that is high rates will tend to limit economic growth, most components are solid. Other data in today's report include moderate readings for both ongoing and lagging indicators, at plus 0.2 percent each.

Recent History Of This Indicator:
Leading indicators have been soft, down 0.2 percent in the October report following two unchanged readings. The Econoday consensus for November is a gain of 0.5 percent. Though manufacturing components in the report have been especially soft, the gain for the ISM new orders index does point to support for November. And a steepening yield curve could point to increasing strength for the report's interest rate component.