Solid job growth and greater industrial production in October offset September's gloomier economic data, the Conference Board said Monday.
After falling by 0.8% the previous month, the board's monthly index of leading indicators, a gauge of economy activity in the next three to six months, rebounded by 0.9% in October -- falling closer in line with the long-term, optimistic outlook cited in surveys by the majority of small-business owners.
Seven of 10 leading index components were upbeat last month, including fewer jobless claims and a longer workweek for manufacturers. The money supply -- the single biggest factor in calculating the index -- alone added 0.13% to total gains. Only building permits and stock prices were down, with consumer expectations unchanged, the board reported.
Weekly jobless claims dropped in October to 350,500, from a peak of 404,700 in weeks after Hurricane Katrina, which struck the Gulf Coast on Aug. 29. Over the same period, the average workweek rose to 41 hours, about an hour and a half more than previous months.
The cooling housing market saw fewer building permits issued for new homes last month, knocking 0.18% off the index, the board said. That's 1.1% below last year and the sharpest decline since dropping 7.2% in September 1999, the Commerce Department said last week.
The Conference Board's coincident index, a measure of current economic activity that has declined in recent months, jumped 0.3% in October, the board said. Three of four index components moved upward, including industrial production, manufacturing and trade sales, and employee payrolls. Personal income was down, the board said. Yet, despite falling sharply in August and September, the index gained 0.6% in the six-month period ending in October.