European Stars And Stripes (Newspaper) - December 2, 1987, Darmstadt, Hesse                                Page 4 the stars and stripes wednesday december 2,1987 top economic gauge slipped in october Washington a the govern ment tuesday said its main economic forecasting gauge edged Down 0,2 per cent in october the first setback in nine months. Bui analysts look the modest decline in he face of he Stock Market plunge As an encouraging signal the Economy May avoid a recession neat year. The Commerce department s Index of leading indicators showed Broa based strength in a variety of areas and would have been up a sizable 0.9 percent if not for the drop in Stock prices. The government also revised the sep tember leading Index upward to show it unchanged rather than Down 0.1 percent As first reported. While not discounting the Impact the Stock Market collapse could have on con Sumer Confidence Many economists said the performance of the leading Index supported i hair belief that the country is headed for slower growth next year but no recession. In a second report tuesday the com Merce department said construction spending fell 0.5 percent in october to a seasonally adjusted annual rate of j407.9 billion. It was the first decline since March and was led by big drops in spending for new factories and shopping centers. Analysts predicted further weakness in construction in the months ahead As residential construction is depressed by High mortgage Rales and High apartment vacancy rates. The leading Index which is composed of i i it inward Flint in business Statis tics has taken on new importance As analysts try to determine How severe an Impact the Stock Market decline will have on economic growth. Three consecutive monthly declines in the leading Index has often but not Al ways signalled an impending recession. But with september now revised to show no drop analysts said that even if the Index Falls As expected in november it will not have the same negative Impact. The magnitude of the october de Cline in the Index is smaller than what one would associate with the Onset of a recession said Jerry Jasinowski chief economist of the National association of manufacturers. The indicators declined because the Slock Market fell through the floor and not because the underlying Economy was particularly  Allen Sinai chief economist for Shear son Lchman Brothers of new York said he expected growth As measured by the Gross National product would dip to a sluggish 2 percent annual Rale next year Down from the 3.7 percent Gnu growth me so far this year. The leading Index and the logic of the Slock Market crash do Point to a significant slowdown next year but i think we will be Able to avoid a recession if nothing worse happens he said. Analysts Are particularly concerned Hal continued turmoil in the Slock mar Ket and a plunging Dollar could cause Consumers to grow More fearful about the future during the critical Christmas Selling season. The Dow Jones Industrial average which fell More than 76 Points on Mon Day in a so loft reminiscent of the octo Ber crash partly recovered on tuesday in All six of the nine available Indica tors were positive forces on the leading indicators Index. Besides the mock plunge the other negative factors were a drop in orders for consumer goods and a decline in build ing permits. The biggest positive influence came from an increase in the length of the average manufacturing workweek. This represented a rebound from september when the workweek was artificially de pressed because the government Turvey was taken during the labor Day Holiday. The second biggest positive Factor Wai an increase in the Money Supply reflect ing efforts the Federal Reserve Board made to steady the Economy following the Market collapse by supplying enough Money to drive in Tercel rates lower. 3 firms to negotiate contracts for construction of space station Washington