The U.S. economy is facing mounting challenges as an index designed to gauge business cycles in the country experienced its 15th consecutive monthly decline in June. The Leading Economic Index (LEI), which serves as a forward-looking indicator of future economic activity, dipped by 0.7% to 106.1, following a revised 0.6% decrease in May. This sustained decline marks the longest streak of downturns since the period leading up to the 2007-2009 recession.
Economists had expected a 0.6% drop, but the actual decline was slightly greater, signaling concerns over the current state of the economy. The report, released by The Conference Board on Thursday, points to weakening consumer sentiment and a rise in unemployment claims as the primary factors contributing to the downward trend.
Justyna Zabinska-La Monica, the Senior Manager of Business Cycle Indicators at The Conference Board, commented on the data, stating that the combination of June’s figures suggests a continued slowdown in economic activity in the coming months. The organization reaffirmed its prediction that the U.S. economy is likely to face a recession from the third quarter of the current year until the first quarter of 2024.
According to Zabinska-La Monica, the economy is confronting several challenges that are exacerbating the downturn. Elevated prices, tighter monetary policies, limited access to credit, and reduced government spending are all factors that are expected to further dampen economic growth.
The Conference Board’s analysis reveals that the contraction in the Leading Economic Index is intensifying, with a 4.2% decline over the past six months compared to a 3.8% decrease from June to December 2022.
As the economic outlook remains uncertain, policymakers and businesses are closely monitoring these developments. The possibility of a prolonged recession is now looming, and concerted efforts may be required to mitigate the challenges ahead and support the economy during these difficult times.
Source : Reuters
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