New leading indicator index points to moderate economic improvement

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OTTAWA - A leading indicator for the Canadian economy registered its second consecutive monthly gain in September, a signal of moderate growth.

The index compiled by the Macdonald-Laurier Institute in Ottawa rose 0.2 per cent in the month, following a 0.1 improvement in August.

That follows a steady decline in the index during the first half of the year.

The index suggests the economy is picking up after a weak first six months, in line with expectations by the Bank of Canada. A consensus estimate by private sector economists released by the Finance Department on Monday also pointed to continued growth, but not as strong as the central bank's forecast.

The new measure from the think-tank was established last month to fill the gap of economic indicators created after Statistics Canada ceased issuing the index.

The positives for September included a healthy 0.6 per cent increase in the money supply, and a narrowing in the interest rate spread between private and public borrowers.

On the negative side, the housing component fell 2.5 per cent due to both fewer starts and existing home sales.

Organizations: Macdonald-Laurier Institute, Bank of Canada, Finance Department Statistics Canada

Geographic location: OTTAWA

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