A gauge of future U.S. economic activity rose slightly in September, suggesting that the economy may grow at a modest pace despite a worsening housing crisis. The Conference Board, a business-financed research organization, said Thursday its index of leading economic indicators-which is designed to predict economic activity in the next three months-rose 0.3 percent in September to 137.9, slightly below analysts' forecasts. The modest growth follows a sharp 0.8 percent decline in August. The index has been erratic this year, rising one month and falling the next. “You have an economy sputtering, in which some parts are trying to regain momentum, while other parts like the housing market are losing steam,” Conference Board labor economist Ken Goldstein said. “The question is, how long will it remain [erratic]?” Seven of the 10 areas tracked by the index increased last month, including vendor performance, the job market, and stock prices. The housing market continued to fall. The September reading only partially reflected the Federal Reserve's decision to lower a key interest rate at mid-month, Goldstein said. The central bank cut its key rate on September 18 by a half-percentage point to 4.75 percent, a move that helped loosen credit conditions and ease turmoil in financial markets. The Conference Board's coincident index, which measures current economic conditions, rose 0.2 percent in September. Its lagging index, which measures past economic performance, rose 0.5 percent last month.
