WASHINGTON (MarketWatch) -- The U.S. economy is very weak and getting weaker, the Conference Board said Thursday.
The index of leading economic indicators fell 0.8% in October, with negative contributions coming from six of the 10 component indicators, the private research group reported. The data point to a "sustained contraction."
"The economy is contracting, and the pace of contraction may intensify over the next few months," said Ken Goldstein, an economist for the Conference Board. "The economy was very weak."
The drop in the October index "signals a clear deterioration in the economy since the summer," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics. "But we knew that already. It's not clear there's anything new here."
On Wednesday, the Federal Open Market Committee released updated forecasts. Members of the Federal Reserve's policy-setting panel now expect the economy to contract for four straight quarters before a gradual recovery takes hold late next year.
Without using the word, the Fed's forecasting a recession lasting a year or so. See full story.
The biggest negative contributors to the leading index were stock prices, building permits and consumer expectations. Vendor performance, jobless claims and capital-goods orders also declined.
The money supply and the interest-rate spread were positive in October, indicating that the Fed is leaning hard against the U.S. downturn. Orders for consumer goods were also estimated to be positive in October.
The factory workweek was unchanged.
The leading index has fallen at a 4.7% annual pace in the past six months, with three of the 10 indicators growing over that period.
The index is designed to forecast economic activity six to nine months ahead.
In a separate report, the Philly Fed index fell to negative 39.3 in November, as expected, from negative 37.5 in October. It marked the lowest since October 1990, indicating severe weakness in the manufacturing sector in the Philadelphia region. See full story.
For the first time since 2003, more manufacturing firms reported receiving lower prices for their goods than received higher prices.
