Report: Economy improvesBy MARTIN CRUTSINGER
THE ASSOCIATED PRESS | November 28,2013WASHINGTON — A measure of the U.S. economy’s health improved in October, suggesting consumers and businesses mostly shrugged off the 16-day partial government shutdown.
The Conference Board said Wednesday that its index of leading indicators rose 0.2 percent in October to a reading of 97.5.
It was the sixth gain in seven months and followed large gains in the previous two months.
The index is designed to signal economic conditions over the next three to six months.
Kathy Bostjancic, an economist with the Conference Board, said the recent gains point to stronger growth next year.
The Conference Board forecasts that the economy will grow 2.3 percent in 2014, up from the anticipated 1.6 percent growth for this year.
The index is comprised of indicators, most of which have already been released individually. Seven of the 10 indicators showed positive readings in October. Low interest rates and a rise in applications for building permits were the strongest.
The October index was held back by a slump in consumer confidence and rise in weekly unemployment benefit applications.
The Labor Department has said that unemployment benefit applications fell last month because of unusual circumstances: the partial government shutdown temporarily laid off some workers, and backlogs in California distorted claims for the nation’s largest state.
Unemployment benefit applications have since fallen back to pre-recession levels.
Cooper Howes, an economist at Barclays, said consumer confidence should also improve as the impact of the government shutdown fades.
The University of Michigan’s index of consumer sentiment increased to a final reading of 75.1 for November, up from the preliminary reading of 72.0.
Mortgage buyer Freddie Mac also said Wednesday that the average rate on the 30-year loan increased to 4.29 percent from 4.22 percent last week. The average on the 15-year fixed ticked up to 3.3 percent from 3.27 percent.
Rates have risen nearly a full percentage point since May after the Federal Reserve signaled it might slow its bond purchases by the end of the year. Rates peaked at nearly 4.6 percent in August. But the Fed held off in September and most analysts expect it won’t move until next year.
The increase in mortgage rates has contributed to a slowdown in home sales over the past two months.MORE IN National / World BusinessWASHINGTON — The Federal Reserve plans to keep a key interest rate at a record low to support a U.S. Full StoryMILAN — Fiat Chrysler Automobiles announced Wednesday it will spin off sports car maker Ferrari... Full Story
- Most Popular
- Most Emailed
- RICHARD'S POOR ALMANACK: On this day in 1618, English author, poet, soldier, adventurer Sir Walter Raleigh is beheaded for conspiring to overthrow King James I, but more likely to mollify offenses to Spain. His executioner has to implore him for silence.
- RICHARD'S POOR ALMANACK: On this day in 1492, Italian explorer, admiral of the ocean sea, Christopher Columbus, sailing for the Spanish crown, 'discovers' Cuba; on this day in 1964, U.S. officials deny American involvement in bombing North Vietnam.
- Video: Fire engulfs house on Pine Street
- RICHARD'S POOR ALMANACK: On this day in 1936, Mrs. Wallis Warfield Spencer Simpson, mistress of King Edward VIII, is granted her second divorce, enabling her to marry the king. The government, the Church of England and the London Times have another idea.
- RICHARD'S POOR ALMANACK: V-2 No. 13, launched this day in 1946 from White Sands, New Mexico, takes first photographs of Earth from the edge of the planet's outer atmosphere; 1947: Walt Disney testifies before HUAC, names employees he says are communists.
- TOMORROW'S HEADLINES TODAY: Vermont's brand discussed at Killington, state's attorney candidates Marc Brierre and Rose Kennedy profiled, Curtis reports about Rutland police chief's new job, and four arrested, charged for heroin, crack sales.