Falling Economic Index Suggests Recession Ahead

Ford assembly plant

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Key Takeaways

  • The Conference Board's Leading Economic Index fell 0.6% in April, in the 13th straight monthly decline.
  • Weaknesses among the underlying components of the index were widespread.
  • The Conference Board said the results signal a worsening economic outlook that could lead to a recession in 2023.

A closely-watched gauge of the U.S. economy fell in April for the 13th consecutive month, adding to speculation a recession could come this year.

The Conference Board’s Leading Economic Index (LEI) dropped 0.6% last month to a reading of 107.5, in line with estimates and a smaller decline than March’s 1.2%. The LEI has dipped 4.4% since October, more than the 3.8% slide in the previous six months.

Justyna Zabinska-La Monica, The Conference Board’s senior manager of business cycle indicators, said that weaknesses among the underlying components in the April LEI were widespread, with only stock prices and manufacturers’ new orders for both capital and consumer goods improving. 

She said the results signal “a worsening economic outlook,” and that the group is predicting a contraction of economic activity starting in the current quarter, “leading to a mild recession by mid-2023.”

LEI as of May 18, 2023

The Conference Board

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  1. The Conference Board. “US Leading Indicators.”

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