Economic outlook bleak, index says

The Conference Board's index of leading indicators, which measures the economic outlook for the next three to six months, fell 0.8% in October in a sign that the economy will continue to suffer in the months ahead. The decline follows a 0.1% increase for the index in September, downwardly revised from a estimated reading of 0.3%. Economists surveyed by Briefing.com had expected the October index to fall 0.6%. The index has declined 4.7% over the six months ended in October, with six of the 10 components of the index falling during that period. The indicators that declined included stock prices, building permits, consumer expectations and the index of supplier deliveries. The lone positive data came from two indicators: the money supply and the interest-rate spread. The coincident index, which measures current economic conditions, rose 0.2% in October, following a 0.7% decrease in September. “The economy is contracting, and the pace of contraction may intensify over the next few months,” Ken Goldstein, economist at the New York-based Conference Board, said in a statement. “The economy was very weak, laboring under the weight of a sustained and intense housing downturn and sustained sharp increases in energy prices,” he said. “While energy prices have begun to reverse, the financial crisis sharply lowered consumer and business expectations,” Mr. Goldstein added.