The Conference Board reported Thursday morning that its Composite Index of Leading Economic Indicators declined 0.8% in October, following a 0.1% increase in September, and a 0.9% decline in August.

The decline in the leading index in October was led by sharp drops in stock prices, building permits, consumer expectations and the index of supplier deliveries and came despite positive contributions from real money supply and the interest rate spread. In the past two months, without the very large positive contributions from inflation-adjusted money supply (the largest in seven years), the leading index would have been substantially weaker, the Conference Board said.

Between April and October 2008, the leading index declined 2.4% (a -4.7% annual rate), falling considerably faster than the 1.2% decrease (a -2.3% annual rate) during the previous six months. In addition, the weaknesses among the leading indicators have remained widespread in recent months.

Ken Goldstein, a Conference Board economist, said, "The economy is contracting, and the pace of contraction may intensify over the next few months. The economy was very weak, laboring under the weight of a sustained and intense housing downturn and sustained sharp increases in energy prices. While energy prices have begun to reverse, the financial crisis sharply lowered consumer and business expectations. The result is a contraction in demand that may intensify this winter."

The leading index now stands at 99.6 (2004=100).