The index of leading indicators rose 0.9 percent in September, up from 0.3 percent in August, with increases in new business formations and the length of the average work week in manufacturing contributing most to the gain, the Commerce Department reported yesterday.
The department also revised the figures for July and August, which earlier were reported as an 0.8 percent increase and a 0.1 percent decline, respectively. The new July estimate is a lower 0.6 percent increase.
For the third quarter as a whole, the index rose 2.8 percent, substantially less than the 5.9 percent increase in the first quarter or the 4.7 percent in the second.
The September increase pleased the White House, which issued a statement saying, "Since leading indicators are predictive of economic activity, today's figures show we can expect steady economic growth in the months ahead . . . This is the 13th consecutive month of increases in the leading indicators."
Nevertheless, the slower rate of increase in the index suggests that economic growth likely will be slower in coming months, analysts said. In addition, fragmentary figures for October for several of the indicators point to a much smaller increase in the index this month or possibly even a decline, the analysts said.
Only 10 of the index's 12 indicators were available. Five went up and five went down, but the increases were generally much larger than the declines.
In addition to the gains in business formations and the work week, higher stock prices; higher contracts and orders for business plant and equipment, adjusted for inflation, and a drop in initial claims for unemployment benefits contributed to the index's rise.
Falling indicators were those covering new orders for manufactured consumer goods and a measure of the money supply, both adjusted for inflation; the number of companies receiving slower deliveries from suppliers; building permits; and the change in sensitive materials prices.
A separate index of four indicators that move coincident with changes in the economy rather than in advance rose 1.6 percent. An index of lagging indicators fell 0.7 percent.