The Index of Leading Economic Indicators, a barometer of future economic activity, declined 0.8 percent in September in yet another warning sign of tough times ahead, the government said Friday.
The drop, in line with forecasts by private analysts, follows a revised decline of 1.2 percent in August. In July, the index was unchanged.Three or more consecutive negative quarters in the index indicate the danger of an impending recession, although the United States has seen the index fall into that pattern in recent years without winding up in a downturn.
"The probability of a recession based on the index has gone to over 90 percent," said Micheal Niemira, an economist at Mitsubishi Bank in New York.
"The real problem is you can't find anything out there that really looks positive," Niemira said.
In a separate report, the nation's jobless rate remained at 5.7 percent in October. The Labor Department's Bureau of Labor Statistics said large job losses in the construction and manufacturing industries, and a slight downturn in non-farm payroll employment, were offset partially by gains in the service sector.
"It's a clear indication we're in recession," said Cynthia Latta, an economist at DRI/McGraw Hill in Lexington, Mass. "If the number of jobs out there is shrinking, I don't know how you can call it anything else."
"While that may not be the correct conclusion, it is the most reasonable one to draw," said Robert Dederick, chief economist at the Northern Trust Co. in Chicago. "We've lost our footing, that's for sure."
Total civilian employment slipped to 117.7 million in October from 117.8 million the month before. The government said employment has dropped by 700,000 since midyear after gaining 500,000 jobs during the first half of the year.