Like their hits on the Gulf Coast, Hurricanes Katrina and Rita pummeled the September index of leading economic indicators compiled by the Conference Board, a New York-based business research group.
The leading index fell seven-tenths of a percentage point from August's mark to 136.8 last month, its third consecutive monthly decline. "In September, the largest negative contributors to the leading index were the index of consumer expectations and initial claims for unemployment insurance," the Conference Board said October 20 as it released its latest data. The leading index, which previews the expected path of the economy for the next three to six months, "has slowed steadily since mid-2004," the research group noted. "The impact of the hurricanes reinforced an already existing moderation in the leading index."
Earlier this week the Conference Board predicted that rising energy prices and the hurricanes would have "a significant impact on the U.S. economy, putting upcoming holiday retail sales at risk." However, the economic impact of the hurricanes by itself "is unlikely to trigger a recession," the research group said. Indeed, the U.S. economy "will feel like it is moving forward as early as the first quarter of 2006," it predicted. "Long-term growth should be back on track in the second half of 2006."