Leading indicators fall in October
The New York-based Conference Board said its monthly forecast of economic activity declined 0.8 percent in October, worse than the 0.6 percent decrease expected by economists surveyed by Thomson Reuters.
Over the last seven months, the index declined at a 4.7 percent annual rate, faster than any decline since 2001.
Most of the decline was due to the plunge in stock prices, the drop in building permits and the decline in consumer expectations, said Ian Shepherdson, an economist at High Frequency Economics.
"Overall, though, this is horrible, and it signals a clear deterioration in the economy since the summer," he said.
The index, which weighs indicators such as manufacturers' new orders and supplier deliveries, has fallen four of the last six months. It rose slightly in September, thanks to federal interventions that increased the money supply, a component of the index. October's reading also would have been worse without that increase.
Despite the interventions, new claims for unemployment benefits jumped last week to 542,000, a 16-year high, the Labor Department said Thursday. The last time weekly claims were this high was July 1992, when the U.S. economy was emerging from a recession. The unemployment rate in October was 6.5 percent.
Companies that announced mass layoffs in the last week include Boeing Co., Pilgrim's Pride Corp., Citigroup Inc., Union Pacific Corp. and Sun Microsystems Inc.
"The economy is contracting, and the pace of contraction may intensify over the next few months," said Ken Goldstein, an economist at the Conference Board.
AP Economics Writer Christopher S. Rugaber contributed to this report.
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