By Seth Sutel
The Associated Press
NEW YORK - A closely watched barometer of future economic activity fell in September for the fourth consecutive month, suggesting that the recovery may be cooling. A separate report from the Labor Department, however, suggested modest improvement in the job market.
The Conference Board, a private research group based in New York, said Thursday that its Index of Leading Economic Indicators fell 0.1 percent last month, following declines of 0.3 percent each in August and July and 0.1 percent in June.
The index is a composite of economic measures such as manufacturing and interest rates, and is considered a good indicator of where the economy is headed over the next three to six months.
Ken Goldstein, an economist for the Conference Board, said the fourth consecutive decline in the index was "a clear signal that the economy is losing momentum heading into 2005." After growing at an annual pace of nearly 4 percent in the third quarter, the economy is likely to expand at a slower pace in the fourth quarter of this year and the first quarter of next year, he said.
Goldstein and other economists said the wave of hurricanes that hit Florida as well as soaring energy prices may have held back some key sectors in the economy, such as home building. The Conference Board said that the moves in the index did not yet signal a downturn or an end to the expansion.
Jose Rascal, an economist with Merrill Lynch, said that the latest decline in the index showed that the economy "faces some weakness" going forward in the next few months, especially with the prospect of higher home heating costs as winter approaches.
"You're looking at an economy that has begun to slow meaningfully," Rascal said.
On the job front, the Labor Department reported Thursday that initial claims for unemployment benefits fell by a seasonally adjusted 25,000 to 329,000, the lowest level since early September. Claims had risen by 16,000 in the previous week.
Economists pointed to what they said was a stronger indicator of modest but steady improvement in job market conditions, a decline of 8,000 in the number of people continuing to collect unemployment benefits.
Josh Feinman, chief economist at Deutsche Asset Management, called the improvement a sign that the labor market has been "plodding toward improvement."
Closson's drops Hyde Park store plan
Delta's stock value is in the eye of the holder
Kroger deal down to wages
AIG just misses forecast; grand-jury probe looms
Discount airline ATA cuts more jobs
Local insurers feel effects of hurricanes on earnings
US Airways' pilots union OKs contract - and 18% pay cut
Google's 3Q profits more than double '03
Settled in jail, Martha pushes federal appeal
Qwest agrees to $250M civil fine
Leading indicators down; jobs improve
North of the border, cola drinkers crave the real thing
Local business summary