Newspaper article THE JOURNAL RECORD

Economic Gauge Falls Fifth Month; Forecasts Slump

Newspaper article THE JOURNAL RECORD

Economic Gauge Falls Fifth Month; Forecasts Slump

Article excerpt

WASHINGTON (AP) - The government's chief economic forecasting gauge plunged in November, the fifth consecutive monthly drop, and analysts said it signaled increased joblessness and a slump extending until late next year.

``The basic message is there's no light down there in the tunnel that we can see,'' said economist Robert G. Dederick of Northern Trust Co. in Chicago. ``The recession is clearly in place and clearly has further to go.''

Friday's announcement of the November decline of 1.2 percent in the Commerce Department's Index of Leading Indicators was the latest in a spate of gloomy news about economic conditions last month.

Unemployment jumped to a three-year high of 5.9 percent. New orders to factories for ``big ticket'' durable goods such as automobiles and appliances plunged 10.5 percent, matching the worst decline on record. Consumer spending and income growth was virtually flat, and construction of single-family homes fell to the lowest level since 1982.

Analysts said the latest drop in the leading index, designed to forecast economic activity six to nine months in advance, offered almost no hope that the economy will revive soon.

Less than three weeks ago, most private analysts believed the economy, having entered a recession in the fourth quarter of this year, would begin to grow again next spring.

The November decline in the leading index followed a 1.3 percent drop in October, the steepest since the month after the October 1987 stock market crash.

The decline left the index at 139.7 percent of its 1982 base of 100, down 4.4 percent from its 146.2 peak in June. It has been the worst multiple-month retreat by the index since 1981, at the start of the last recession.

``The November indicators leave no doubt that a serious and lengthy recession is under way,'' said economist William K. …

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