The payment: The US benchmark index fell for the sixth straight month in August, “possibly signaling a recession.”
The Conference Board’s leading index fell 0.3% last month, continuing a period of declines that began in March.
The LEI is a scale of 10 indicators designed to show whether the economy is improving or deteriorating. Economists polled by the Wall Street Journal had forecast a 0.1% decline.
Big picture: The economy has slowed from the rapid pace of last year. Gross domestic product, the economy’s scorecard, contracted in the first two quarters of the year.
Now the Federal Reserve is raising interest rates sharply to try to quell the highest inflation in nearly 40 years, and higher interest rates are slowing the economy. Many economists even think a recession is likely by next year.
Key data: With the exception of jobless claims and the interest rate spread, most components of the leading economic index declined in August.
The details of the report were not entirely murky.
A measure of current economic conditions rose 0.1%, while the so-called lag index – a kind of looking in the rearview mirror – rose 0.7%.
The report is published by the Conference Board, a private non-profit organization.
Looking ahead: “The US LEI declined for the sixth straight month, possibly signaling a recession,” said Ataman Ozyildirim, the board’s senior director of economic research.
“Economic activity will continue to slow and likely contract across the US economy,” he added. “The Conference Board is forecasting a recession in the coming quarters.”
Market reaction: The Dow Jones Industrial Average DJIA, -0.43% S&P 500 SPX, -0.90% fell again in Thursday trading.
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