Business World

Friday 24 November 2017

US signs point to more growth into next year


Bob Willis

The index of US leading indicators climbed more than forecast in October, signaling the world's largest economy will keep growing in early 2012.

The Conference Board's gauge of the outlook for the next three to six months rose 0.9pc, the biggest jump since February, after a 0.1pc September increase, the New York- based research group has said. The median forecast of 56 economists surveyed by Bloomberg News projected the gauge would advance 0.6pc.

Gains in consumer spending, manufacturing and homebuilding, combined with fewer job losses, point to an economy that is weathering the turbulence in financial markets caused by the debt crisis in Europe.

Nonetheless, a 9pc jobless rate and political gridlock over deficit-cutting have hurt confidence, which may be a hurdle to a further pickup in the pace of growth.

"The economy looks to be getting better despite the continued drumbeat of negativity in financial markets," said Joseph LaVorgna, chief US economist at Deutsche Bank Securities in New York, who correctly forecast the gain.

"That speaks to US resiliency. If we can put some of these fiscal issues behind us, even for a short period of time, we might be able to come back."

Stocks rose as yields on Italian and Spanish bonds fell after the ECB bought the securities to ease the fallout from the debt crisis. Treasury securities dropped, pushing the yield on the benchmark 10-year note up to 1.99pc.

The index "is pointing to continued growth this winter, possibly even gaining a little momentum by spring," Ken Goldstein, an economist at the Conference Board, said. "The lack of confidence has been the biggest obstacle in generating forward momentum."

A surge in stock prices also contributed to the increase in the gauge last month. The Standard & Poor's 500 Index rose 11 pc in October. (Bloomberg)

Irish Independent

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