Concerns over the future of the U.S. economy were raised Monday with a new report showing activity fell for a fourth consecutive month.
The Conference Board, a private research group, released its monthly index of leading economic indicators, showing a 0.2% drop in September after falling 0.1% the month before.
While the drop raises some concerns about the possibility of a "double dip" recession, Newport Communications Senior Economist Jim Haughey said the decline says more about the sluggishness of the manufacturing sector than it does about overall economic growth or decline ahead.
"Falling stock prices and rising layoffs were largely responsible for the decline," he said. "But both have now reversed trend in October with stock prices now 3.5% above the September average and layoffs so far in October 7% below the September average. As a result, the leading indicator index is likely to increase slightly next time. This prevents three declines in a row that is often taken as a signal of a coming downturn in the economy."
Five of the 10 components that make up the leading indicators index fell in September, led by stock prices, initial jobless claims and the Treasury bond yield curve.
Four other components rose in September: slower deliveries, building permits, money supply and manufacturers' new orders for non-defense capital goods.