Newspaper article THE JOURNAL RECORD

Leading Indicators Flat; Factory Orders Decline

Newspaper article THE JOURNAL RECORD

Leading Indicators Flat; Factory Orders Decline

Article excerpt

WASHINGTON (AP) _ The nation's economy is growing steadily with no significant price increases reaching consumers, a flurry of government reports suggested Wednesday.

The news was encouraging but _ particularly with the weakness of the dollar on world markets _ not likely to head off another round of higher interest rates after next week's election, analysts said.

The government's chief forecasting gauge of future economic activity, which had risen sharply in August, was unchanged in September. It had been flat in July as well.

The Commerce Department also reported that factory orders fell 0.2 percent in September, reversing the robust increase of 4.7 percent the previous month as demand for cars and oil and coal products dropped.

The Federal Reserve, which is expected to raise short-term interest rates again in mid-November, issued its latest survey underscoring the vigor of the economy.

"Economic activity continues to expand in all Federal Reserve districts," the report said. "There are signs of acceleration in the Chicago, Dallas, Minneapolis and Philadelphia districts, while growth has slowed somewhat in the New York district."

The survey, concluded last week, also said that even though labor markets are getting tighter in some sectors and some commodity prices are up, the consumer is not feeling it in the pocketbook. Inflation pressures are building but have not reached the retail level, the Fed said.

"The economy is slowing down and commodity inflation is slowing down. It's probably good news," said Michael Evans of Evans Economics Inc., an economic consulting service in Boca Raton, Fla.

But analysts said the expansion is still not slow enough to suit the Fed and, together with the shaky dollar, would provide support for boosting interest rates for the sixth time this year.

"Economic momentum is moving ahead with full steam," said economist Sung Won Sohn of the Norwest Corp. in Minneapolis. The Federal Reserve "will have to raise rates at the next meeting to calm financial markets. …

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