New data confirms Fed’s optimism over US economy

<p>The Conference Board Leading Economic Index unveiled better-than-expected data for the US.</p>

The Conference Board Leading Economic Index (LEI), an index of US leading indicators, increased by 0.9 per cent in October, following a 0.7 per cent increase in September.

"The LEI rose sharply in October, with all components gaining over the previous six months," said Ataman Ozyildirim, economist at the Conference Board. "Despite a negative contribution from stock prices in October, and minimal contributions from new orders for consumer goods and average workweek in manufacturing, the LEI suggests the US expansion continues to be strong."

According to Bloomberg, it increased more than forecast in October, as gains in manufacturing and easier credit boosted the world’s largest economy. The median forecast of 49 economists surveyed by the news agency called for an advance of 0.6 per cent.

"The upward trend in the LEI points to continued economic growth through the holiday season and into early 2015,” Ken Goldstein, an economist at the Conference Board, said in a statement. “This is consistent with our outlook for relatively good, but not great, consumer demand over the near term."

It also emerged today that US inflation was stable, with consumer prices unchanged in October, as low gasoline costs continued to keep inflation at bay. 

For the past 12 months, overall inflation is up 1.7 per cent, while core inflation is up 1.8 per cent. 

The fresh data echoes the Federal Reserve policymakers who said in minutes of their meeting last month that the US economy was solid and the impact from a slowdown overseas would probably be "quite limited".

However, US markets were mixed in early trading today as poor economic data out of China and Europe prompted concerns about a global slowdown. 

The Standard & Poor's 500 index lost 0.1 per cent to 2,047 at 10:00 ET, while the Dow Jones industrial average fell 0.2 per cent to 17,654. The Nasdaq composite added 0.1 per cent to 4,681.

Find up to date information on the FTSE 100 and spread betting strategies at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.