The third straight monthly decline for the Leading Economic Index (LEI) in October is notable because there have not been a three-month slump since 2009, explained analysts at Wells Fargo.
Key Quotes:
“The soft patch in the manufacturing sector manifests itself in today’s report in a couple of ways. The largest drag came from the new orders component. ISM new orders have been in contraction territory since August, but the index rose to 49.1 in October, suggesting at least some upside momentum.”
“Though it was the third straight monthly decline, the 0.1% move lower in October was only a modest one. If we look at the three-month annualized rate we can see that we’ve been here before in this cycle and the economy has bounced back.”
“Still, some contributors like rising stock prices can be fickle. Thus far in November, the stock market gains are holding. Initial jobless claims, a drag in October, are still creeping higher.”
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