The economy's slowdown could accelerate in the coming months due to rising costs and the sinking housing market, a gauge of future business activity suggested Wednesday.
The Conference Board said its index of leading indicators fell by 0.5 percent in October to a two-year low, after ticking up by 0.1 percent in September and falling by 0.9 percent in August.
Last month's decline was larger than anticipated, as economists surveyed by Thomson/IFR had predicted, on average, a drop of 0.3 percent.
The index now stands at 136.9, its lowest point since September 2005, versus a revised 137.6 in the previous month.
"The data are pointing to a continued slow economy," said the group's economist, Ken Goldstein. "It might even slow a little more after the holidays."
He said businesses are worried about about price increases not keeping up with wage pressures, and meanwhile, consumers are concerned that wages aren't keeping up with price increases.
"Clearly, where the economy is headed in the early months of 2008 is heavily dependent on perceptions about price," Goldstein said.
Energy costs are major source of anxiety. Crude-oil briefly traded above $99 a barrel in overnight trading Wednesday, and appears headed for $100 a barrel.
There are 10 indicators that make up the leading index, and only three of them rose in October: stock prices, real money supply, and manufacturers' new orders for consumer goods and materials.
The other seven indicators _ building permits, unemployment claims, consumer expectations, vendor performance, manufacturing hours, manufacturers' new orders for nondefense capital goods and interest rate spread _ fell.
The group's coincident index, which measures current conditions, was unchanged in October after rising every month since January. The lagging index, a gauge of previous conditions, rose 0.3 percent in October, having increased 0.4 percent in September and 0.3 percent in August.