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NEW YORK (AP) - A monthly forecast of economic activity is expected to drop in October as the effects of job losses and declining consumer spending spread.

The New York-based Conference Board’s index of leading economic indicators is expected to fall 0.6 percent, according to the consensus estimate of economists surveyed by Thomson Reuters. That compares to a 0.3 percent improvement in September.

The report is scheduled to be released Thursday at 10 a.m. EST.

The September reading, which was the first increase in five months, improved largely because cash infusions by the federal government increased the money supply, a component of the index.

The government in September seized control of mortgage finance giants Fannie Mae and Freddie Mac, and made an $85 billion emergency loan to insurer American International Group Inc. The Federal Reserve and central banks in Europe also pumped $180 billion into money markets to free up lending between banks.

The index is designed to forecast economic activity in the next three to six months based on 10 components, including stock prices, building permits and initial claims for unemployment benefits.

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