Key Economic Indicators Up Modest 0.4% : September Increase Signals Steady but Unspectacular Gains

WASHINGTON —  The government’s main gauge of future economic activity rose 0.4% in September as various business barometers continued to signal steady, if unspectacular, economic growth.

The rise in the Commerce Department’s index of leading indicators followed a 0.1% August decline and a 1% July increase.

Today’s report on the leading index is the last major economic statistic to be released before the Nov. 4 congressional election, a campaign in which both Republicans and Democrats have tried to make the economy an issue.

President Reagan has maintained that the country is enjoying unprecedented prosperity as the recovery nears its fifth year. But Democrats complain that not all of the country is reaping the benefits of the recovery.

Had Been Expected

The increase in the index was in line with what many economists had been expecting, a gain but not so strong a one as to signal that the economy is about to enter a period of rapid growth.

In the last five months, the index has fallen three times. It has risen just 5.6% in the last year. By comparison, when the recovery was beginning in 1983, the index climbed 16.4%.

“The leading index has been performing pretty sluggishly and that is a good picture of what the economy has been doing,” said David Wyss, chief financial economist for Data Resources Inc.

The rise in the September leading index came from strength in seven of 11 indicators.

Manufacturers’ Orders Up

The largest positive contributor was a rise in manufacturers’ orders for consumer goods, followed by gains in business formations, an increase in orders for business plant and equipment, a rise in the money supply, an advance in business and consumer credit, a drop in unemployment claims, and a change in the time it takes businesses to fill orders.

Three of the components held the index back. The biggest negative factor was the sharp decline in stock market prices that occurred in September. Other negative factors were a change in the price of raw materials and a drop in building permits.

In another report today, the Commerce Department said orders to U.S. factories rose 3.4% in September, the strongest monthly gain since a 4.4% rise in November, 1984.