Economic Indicators Shows Stong Rise In October

The index of leading economic indicators rose a very strong 0.9 percent in October pointing to near term acceleration in economic growth. The largest positive is once again in interest rates which reflects the Fed's near zero rate policy. Low unemployment claims are a strong contributor as are housing permits. The stock market is the only negative in today's report but here strength may rebound given gains so far in November.

The leading index is running on the warm side but does underscore some of the economy's key pluses going into year-end and the New Year. Other details include a 0.1 percent rise in the coincident index, which points to very soft ongoing growth, and a 0.1 percent decline in lagging growth which hints at downward revisions to prior data.

Recent History Of This Indicator:
The Conference Board's index of leading indicators rose an outsized 0.8 percent in September against an easy August comparison when the index was unchanged. Low interest rates were the major factor contributing to the strength which was very broad based with only one of the 10 components, consumer expectations, in the negative column. The interest rate component had a 0.27 percentage point contribution to the index; lending credit, 0.11 percentage points; initial jobless claims, 0.09 percentage points; and ISM new orders, 0.09 percentage points among the most positive components.