A widely watched measure of future economic activity fell for its third consecutive month in September because of a rise in energy costs that was magnified by Hurricane Katrina, a private research group said Thursday.
The Conference Board said that its The Index of Leading Economic Indicators, which attempts to measure future economic growth, fell 0.7 percent in September, following declines of 0.1 percent in August and 0.1 percent in July. Economists had been expecting a decline of 0.5 percent.
“The spike in energy prices is another major factor changing the direction of the economy, worsened by a decline in confidence by both consumers and chief executives,” Ken Goldstein, labor economist at the Conference Board said in a statement that accompanied the Conference Board’s report.
Goldstein also noted: “Add this to the negative impact of the hurricanes and flooding, resulting in lost jobs and incomes, and lost output, and we could be in for slower economic growth through the end of the year.”
The Conference Board said the largest negative contributors to the leading index were the index of consumer expectations and initial claims for unemployment insurance. The growth rate of the leading index has been slowing from a peak growth of about 10.0 percent at the end of 2003 and it is now fluctuating in the 0.5 percent to 1.5 percent annual rate range.