Gauge of US economy posts healthy 0.9 per cent rise in October, best showing since July

Photo: The Canadian Press. All rights reserved.

In this Wednesday, Sept. 17, 2014 photo an excavator prepares to lift a storm water drainage pump on a construction site in Miami Beach, Fla. The Conference Board releases its index of leading indicators for October on Thursday, Nov. 19, 2014. (AP Photo/Wilfredo Lee)

WASHINGTON - An index designed to predict the future health of the economy rose in October at the fastest pace in three months.

The Conference Board said Thursday that its index of leading indicators increased 0.9 per cent last month following a 0.7 per cent rise in September, which had been initially reported as a slightly stronger 0.8 per cent gain. The October reading was the best showing since a 1.2 per cent jump in July.

Conference Board economist Ken Goldstein said the October performance "points to continued economic growth through the holiday season and into early 2015." But he said there were continuing concerns about slow business investment and lacklustre income growth.

The leading index is composed of 10 forward-pointing indicators and eight showed strength in October, led by favourable interest rates and gains in manufacturing orders.

Stock prices were a drag on the index in October and average weekly manufacturing hours held steady.

The overall economy grew at a solid 3.5 per cent annual rate in the July-September quarter and many economists believe growth will remain at a healthy pace of around 3 per cent over the next year.