Leading economic indicators index fell 0.2 percent in November
The index of U.S. leading indicators fell in November, pointing to a slowdown in the economy early next year as companies curb investment and global growth cools.
The Conference Board's gauge of the outlook for the next three to six months dropped 0.2 percent after a revised 0.3 percent gain in October that was larger than initially reported, the New York-based group said Thursday. The November drop matched the median forecast in a Bloomberg survey.
The threat to the economy from more than $600 billion in automatic government spending cuts and higher taxes next year has prompted companies to pare equipment orders. At the same time, household purchases are being sustained and cheaper borrowing costs are boosting housing, helping underpin the expansion.
"We're moving sideways in this economy," Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said before the report. "There's a lot of uncertainty about the fiscal cliff. The fourth quarter is likely to be pretty weak."
Estimates of 48 economists in the Bloomberg survey ranged from a decline of 0.5 percent to a gain of 0.5 percent.
In another report Thursday, the Commerce Department said the U.S. economy grew at a 3.1 percent annual rate in the third quarter, more than previously reported. The Labor Department said the number of Americans filing first-time claims for unemployment insurance payments rose for the first time in five weeks, a sign further improvement in the jobs market depends on faster economic growth.
Five of the 10 indicators in the leading index contributed to the decrease, led by unemployment claims, stock prices and factory orders.
"The indicators reflect an economy that remains weak in the face of strong domestic and international headwinds, as it faces a looming fiscal cliff," Ken Goldstein, an economist at the Conference Board, said in a statement. "Growth will likely be slow through the early months of 2013."
The Conference Board's index of coincident indicators, a gauge of current economic activity, rose 0.2 percent after a 0.1 percent gain in the prior month.
The coincident index tracks payrolls, incomes, sales and production the measures used by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions.