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A major forecaster of future economic activity predicts the weakness will continue into 2002.
The Conference Board reported today that its Composite Index of Leading Economic Indicators dropped by 0.5 percent last month, its sharpest one-month dip since January 1996. The index declined by a revised 0.1 percent in August.
"The two-month decline in the index suggests that the already weak economy is likely to remain weak into next year," said Conference Board economist Ken Goldstein. "The overall reading from these numbers indicates that manufacturing and services are experiencing a significant slowdown. Economic demand has slowed sharply. This is likely to be reflected in the numbers on orders and housing permits over the next few months. The service economy is also weakening, with little reason to expect any quick turnaround."
The Conference Board said things would have been worse without the Federal Reserve's aggressively expansionist monetary policy. The index now stands at 109.2.