The Conference Board reported Thursday that its Composite Index of Leading Economic Indicators declined 0.4% in November, following a 0.9% decline in October and no change in September.

The decline in the leading index was due mainly to large declines in building permits, stock prices, and initial unemployment claims, which offset continued positive contributions from real money supply (M2) and the yield spread. Without the very large increases in inflation-adjusted money supply since September, the leading index would have been significantly weaker, the Conference Board said. The leading index is now pacing at a negative 5.6%.

The Board's Coincident Index fell 0.3% in November, after a 0.3% increase in October, and a substantial 1.0% decline in September. The Lagging Economic Index edged up by 0.1% in November, following no change in October and a 0.6% rise in September. The decline in the Coincident index was driven by a large contraction in employment and a smaller drop in industrial production. Since May, the coincident index has decreased 1.8% (a -3.5% annual rate), sharply faster than the decline of 0.4% (a -0.7% annual rate) from November 2007 to May 2008, while the weaknesses among its components have remained widespread. The leading and coincident economic indexes have been falling for more than a year now. The rates of their six-month decline have picked up in recent months and are now the largest since 1991.

"The economy has been in recession for a year and the latest indicator data show no sign of improvement in the first months of 2009," said Ken Goldstein, a Conference Board economist. "An intense housing downturn that's about to begin its fourth year and a severe financial crisis with nearly frozen credit markets have sharply lowered consumer and business expectations."