Index of Leading Indicators
Jumped Sharply in November

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A economic barometer aimed at predicting the economy's direction shot up in November, but the increase could have been a short-term response to looser monetary policy.

The Conference Board's index of leading indicators rose 0.6% last month to 106.3, the private business-research group reported Wednesday. The index, intended to predict the economy's health six months down the line, rose 0.1% in October after falling by the same percentage the month before.

November's gain exceeded expectations of a 0.4% increase. Stock prices, money supply and interest-rate spreads were all strong contributors to the advance, however. And all three, at least indirectly, were heavily influenced by the Federal Reserve's three reductions in interest rates dating to late September.

The Fed left interest rates steady last week and has signaled that it doesn't expect to lower rates again anytime soon so the index could fall back some in the months to come. Four of the index's 10 components contributed to a lesser degree and three components were negative contributors.

Even taken November's caveats into account, the index signals little risk of the economy slipping into recession.

"While increases of this size will probably not continue, it is unlikely that we will see any serious retrenchments in the next few months," Michael Boldin, the Conference Board's research director, said in a prepared statement. "This expansion is poised to enter the new year as the second longest on record."