U.S. Leading Economic Index Extends Decline To Six Straight Months In August
(RTTNews) - Potentially signaling a recession, the Conference Board released a report on Thursday showing its index of leading U.S. economic indicators declined for the sixth consecutive month in August.
The Conference Board said its leading economic index fell by 0.3 percent in August after sliding by a revised 0.5 percent in July.
Economists had expected the leading economic index to come in unchanged compared to the 0.4 percent drop originally reported for the previous month.
With the continued decrease, the LEI slumped by 2.7 percent over the six-month period between February and August, a reversal from the 1.7 percent jump over the previous six months.
"Among the index's components, only initial unemployment claims and the yield spread contributed positively over the last six months—and the contribution of the yield spread has narrowed recently," said Ataman Ozyildirim, Senior Director, Economics, at The Conference Board.
He added, "Furthermore, labor market strength is expected to continue moderating in the months ahead. Indeed, the average workweek in manufacturing contracted in four of the last six months—a notable sign, as firms reduce hours before reducing their workforce."
Ozyildirim predicted activity would continue slowing more broadly throughout the U.S. economy and likely contract, citing the Federal Reserve's rapid tightening of monetary policy as a major driver of the slowdown.
While the headline index continued to decline, the report showed the coincident economic index edged up by 0.1 percent in August after climbing by 0.5 percent in July.
The Conference Board said the lagging economic index also increased by 0.7 percent in August after rising by 0.4 percent in July.
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