A US economic barometer weakened for the fourth straight month in September as oil prices surged, showing
a worrying loss of momentum, the Conference Board said today.
The index of leading economic indicators, forecasting activity in the coming months, dipped 0.1 point from the previous month to 115.6, in line with Wall Street expectations.
'A fourth consecutive decline in the leading economic indicators is a clear signal that the economy is losing momentum heading into 2005,' Conference Board economist Ken Goldstein said.
The US economy was likely to slow in the fourth quarter of this year and perhaps the first quarter of 2005 after an estimated expansion of nearly 4% in the third quarter, Goldstein said.
'"The spike in energy prices and the impact of the hurricanes in September may have held down some economic activity, such as homebuilding,' he said. 'If consumers turn cautious - reacting negatively to the lack of stronger job growth - then the economy could indeed start slowing, just as the holidays approach,' he added.
Employers hired 96,000 extra people in September, short of the 150,000 broadly expected by economists, the Labour Department said this month in the last major jobs report ahead of the November 2 election. The unemployment rate was unchanged at 5.4%.
The Conference Board's leading index is compiled from a basket of 10 indicators of future activity.
Five of the components deteriorated, led by vendor performance; the gap between 10-year Treasury bond yields and the overnight federal funds rate; weekly jobless claims; hours worked in factories and orders for consumer goods and materials from manufacturers.
Four components improved, led by money supply; share prices; orders for non-military capital goods from factories and permits for new building. Consumer expectations were steady.
A separate gauge of current economic activity - the coincident index - rose 0.2 point to 118.0. A measure of past activity - the lagging index - was flat at 98.1.
