Key Economic Indicator Drops for Sixth Consecutive Month

September 22, 2022

A comprehensive gauge that measures the direction of the US economy fell again in August for the sixth straight month, fueling fears that the economy is heading for a recession.

The Conference Board’s Leading Economic Index for the United States fell 0.3% last month, following a drop of 0.5% in July. Economists polled by Reuters expected a smaller decline of 0.1%. Over the last six months, the index has fallen 2.7%, a stark reversal from its 1.7% increase during the previous six months.

The index tracks a wide range of economic metrics like employment, housing, manufacturing, and financial markets, and is designed to provide a forward-looking sense of the economy’s direction.

Of the 10 components that the index tracks, all but two have been in negative territory over the past six months.

The Conference Board warns that the index’s six-month slump is “potentially signaling a recession,” and that “economic activity will continue slowing more broadly throughout the US economy and is likely to contract.”

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