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The prospects for the economy a few months down the road deteriorated in November, as continued trouble in the labor and housing markets combined with lower stock prices to signal further weakness in the near future.
A research firm known as the Conference Board said Thursday that its index of leading economic indicators fell 0.4 percent for November. Economists had expected the measure to slip by 0.5 percent.
The leading index compiles economic statistics that tend to move ahead of changes in the overall economy.
The Conference Board said that its coincident index, which tracks indicators that move along with the overall economy, was down 0.3 percent, while its lagging index, which gauges indicators that tend to follow the rest of the economy, edged up by 0.1 percent.
The leading index was pulled down by large declines in building permits, a sign of future home building, and initial jobless claims, a gauge of health in the labor market that tracks the number of people filing first-time claims for unemployment benefits.
A fall in the stock market also helped lead the decline in the leading index, according to the Conference Board's report.
These signs of future weakness were partially offset by positive contributions from the indicators of real money supply and yield spread, signs of the government's attempts to improve the economy. Government authorities have attempted to stabilize financial markets and stimulate the economy with an unprecedented string of interventions lately.
The Bush Administration has been utilizing the $700-billion financial relief fund, which has largely been used to buy equity in banks in order to prop up the companies' capital positions.
Meanwhile, the Federal Reserve has been aggressively cutting short-term borrowing costs, slashing its benchmark interest rate to zero earlier this week. The Fed has also structured a number of lending facilities aimed at improving conditions in financial markets and has said that it is looking into buying long-term government debt to further stimulate the system.
There are 10 indicators that make up the leading index. Only four of these increased during November. Besides the real money supply and interest rate spread, there was a positive contribution from two kinds of new orders received by the country's manufacturers.
Besides the stock market, initial claims and building permits, the leading index was weighed down by a decline in average weekly manufacturing items, a deterioration in consumer expectations and a fall in supplier deliveries, a measure of vendor performance.
The latest reading for initial claims was also released on Thursday. The Department of Labor released its report on initial jobless claims in the week ended December 13th, showing that jobless claims decreased by a little more than expected after reaching a 26-year high in the previous week.
The report showed that jobless claims fell to 554,000 from the previous week's revised figure of 575,000. Economists had expected jobless claims to slip to 558,000 from the 573,000 originally reported for the previous week.
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