Bloomberg News

WASHINGTON — The index of leading economic indicators fell in November, marking the seventh month out of eight without an increase and further fueling concerns that the U.S. economy may be slowing more than Federal Reserve policymakers had wanted.

The Conference Board’s index, a gauge of economic activity over the next three to six months, fell 0.2 % last month after declining 0.3% in October. Last month’s drop mostly reflected falling stock prices and rising layoffs.

The drop may be the reason why retailers reported a disappointing holiday season, causing Goldman, Sachs & Co. analysts to cut earnings estimates for department and specialty stores such as Wal-Mart Stores Inc. and Limited Inc. It also adds to the likelihood Fed officials will cut interest rates next month.

“I don’t think the Fed is going to want to take any chances of a recession, and they will indeed put interest rates down a little bit,” said Clifford Waldman, a private economist in Arlington, Va.

“The indicators are pointing to significantly slower growth in the first half of 2001,’’ said Ken Goldstein, an economist with Goldman Sachs. “Still, the index is only 0.4 % lower than it was one year ago. That is not the mark of any major contraction in business conditions.”

But the U.S. economy expanded in the third quarter at a 2.2% annual rate, its slowest pace in four years, and may be slowing further. That has concerned central bankers, who have noted a drop in consumer confidence, falling stock prices and shortfalls in profits.

The decline in stocks, where the Nasdaq composite index has fallen more than 50% from its high in March, has caused consumers to be less optimistic about the economy than they were early in the year.

Corporate layoffs as a way to cut costs, helped fuel an increase in unemployment claims in November.

And this month a number of large corporations announced some 40,000 layoffs just in time for the holiday season.

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