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Leading indicators fall more than forecast

September 19, 2008|From Bloomberg News

The U.S. economy was heading for a deeper slowdown than forecast even before this month's collapse in financial markets, a gauge of future performance showed Thursday.

The Conference Board's index of leading indicators, which points to the direction of the economy over the next three to six months, fell 0.5%. It had been forecast to decline 0.2%, according to a Bloomberg News survey.

Separately, the Labor Department reported that more Americans than forecast filed first-time claims for unemployment insurance last week because of the effect of Hurricane Gustav.

The August leading-indicators figure was propped up by gains in the stock market that have since evaporated after the failure of Lehman Bros. Holdings Inc. and the U.S. takeover of American International Group Inc. this week.

In the last 11 days, the government also took over mortgage-finance companies Fannie Mae and Freddie Mac, and Merrill Lynch & Co. was rushed into a sale to Bank of America Corp.

A separate report Thursday showed that manufacturing in the Philadelphia region unexpectedly expanded this month. The Federal Reserve Bank of Philadelphia's general economic index rose to 3.8 from minus 12.7 in August.

The Labor Department reported that initial jobless claims last week rose 10,000 to 455,000, led by a jump in Louisiana, reflecting job losses in the wake of Hurricane Gustav.

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