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Economy slows further
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December 1, 1998: 11:09 a.m. ET
Reports show manufacturing slump continuing while housing stands pat
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NEW YORK (CNNfn) - A cornucopia of U.S. economic data greeted traders Tuesday, although the indications for the broader economy were mixed and the bond market reacted with aplomb.
In general, the data showed that the U.S. economy slowed its growth in October, indicating that inflationary forces remain under firm control. The manufacturing sector shrank slightly, but construction remained steady.
After traders digested the news, the 30-year Treasury bond was trading up 23/32 at 103-13/32 to yield 5.03 percent.
Leading indicators on keel
According to the leading economic indicators report released by the Conference Board, the economy slowed a bit more quickly than economists had expected.
The leading index - which measures forward-looking economic factors - increased 0.1 percent to 105.6 in October, while economists had forecast a gain of 0.2 percent.
The October figure was a slight increase from September, when the index stood unchanged.
Six of the ten components of the index rose, led by monetary supply, building permits and the average factory work week. However, jobless claims and consumer expectations both fell, dragging the index lower.
The coincident index - which gauges the economy's health on a real-time basis - also gained 0.1 percent to 121.4, pushed higher by payrolls and personal income.
Only the lagging index continued its downward trend, falling an additional 0.1 percent to 106.8 due to consumer price index volatility.
All three indexes are compiled from an arbitrary baseline of 100, representing the state of the economy in 1992.
Manufacturing slow
The U.S. manufacturing sector also declined, extending its recent sluggish streak according to data released by the National Association of Purchasing Management (NAPM).
The NAPM purchasing managers' index for the month of November slipped to 46.8 percent from 48.3 percent in October. Economists had predicted a smaller fall to 47.5 percent.
The index represents general economic trends, with 50 standing for perfect equilibrium. Scores below 50 indicate that the U.S. economy is contracting.
"This is the sixth month of decline following 22 consecutive months of growth," said Norbert J. Ore, NAPM chair and director of corporate purchasing for Chesapeake Corp. "The overall picture in November is one of faster decline in manufacturing activity."
Of the 20 industries surveyed by the index, only 5 reported improved business in the month - food, petroleum, electronics, transportation equipment and fabricated metals.
Construction unexpectedly steady
Likewise, the pace of U.S. construction held steady in October, with the value of buildings put in place during the month growing at an annual rate of $665.8 billion.
Data released by the Commerce Department indicated that the construction market was growing at a rate of 0.3 percent, nearly the same as an adjusted figure of 0.4 percent in the month previous.
Economists had forecast a minor housing boom, predicting a 0.6 percent rate on average.
New residential spending climbed to an annual rate of $218.4 billion, a 1 percent rise from September's $216.1 billion.
Non-residential spending remained mixed, with public construction falling 1 percent to $147.3 billion from $149.5 billion. Private construction of offices, industrial facilities and other commercial buildings matched residential spending, climbing 1 percent to $168.4 billion from $166.9 billion. 
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