WASHINGTON – A measure of the U.S. economy designed to signal future activity fell in November, suggesting that growth could remain weak in the early part of next year.
The New York-based Conference Board said Thursday that its index of leading indicators dropped 0.2 per cent in November, compared with October, when the index had risen 0.3 per cent.
It was the first decline in the New York-based private economic forecaster’s index since a 0.4 per cent fall in August.
The index is intended to anticipate economic conditions three to six months out.
Conference Board economist Ken Goldstein says the slight decline in the index November reflects an economy that remains weak as it faces a looming fiscal cliff.
The fiscal cliff refers to sharp increases in taxes and cuts in federal spending that could occur in January if no budget deal is reached.
The November decline marked the fourth time the index has fallen this year. The major components of the index that contributed to the weakness were a rise in applications for unemployment benefits, a fall in stock prices and drop in new orders for manufactured goods.
The overall U.S. economy grew at an annual rate of 3.1 per cent in the July-September quarter, the Commerce Department reported Thursday.
But many private economists believe U.S. economic growth has slowed in the current October-December quarter to around 1.5 per cent.
They believe activity will remain below 2 per cent in the first three months of next year but think that growth could strengthen in future quarters as long as Congress and the Obama administration are able to reach a budget deal that averts the pending tax increases and spending cuts.