The index of U.S. leading economic indicators dropped in September by the most in seven months as slowing global growth weighed on stock prices and factory orders.
The Conference Board’s measure of the economic outlook for the next three to six months declined 0.2 percent, the biggest drop since February, after being unchanged in August, the New York-based research group said Thursday. The median forecast in a Bloomberg survey of 40 economists called for a 0.1 percent drop.
Four of the 10 indicators of the composite gauge dropped last month, led by the slump in stock prices and a decline in building permits. Also weighing on the index were a shrinking workweek and a decrease in the Institute for Supply Management’s factory orders measure.
“The U.S. LEI still suggests economic expansion will continue, although at a moderate pace,” Ataman Ozyildirim, director of Business Cycles and Growth Research at the Conference Board, said in a statement. “The U.S. economy is on track for moderate growth of about 2.5 percent in the coming quarters, despite the mixed global economic landscape.”
Economists’ estimates in the Bloomberg survey ranged from a 0.3 percent decrease to a 0.2 percent advance.
The Conference Board’s coincident economic index, a measure of current economic activity, rose 0.2 percent in September after a 0.1 percent gain the prior month. The gauge is determined by growth in industrial production, sales, payrolls and incomes -- the measures used by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions.