A crucial index of economic indicators that are believed to offer insight into the economy's trajectory decreased in July, marking the 16th consecutive month of declines, and it continues to suggest a recession is on the horizon.
At the same time, a gauge of the moment's circumstances shows that the economy is still growing.
According to the Conference Board, its top economic index declined by 0.4% in July, as expected by Wall Street. In July, the index's ten components declined by seven to one.
Recessions have often resulted from the index experiencing wide, steep, and prolonged drops. Nonetheless, the economy this year defied forecasts of a recession and prognosticating indices.
“The leading index continues to suggest that economic activity is likely to decelerate and descend into mild contraction in the months ahead. The Conference Board now forecasts a short and shallow recession in the Q4 2023 to Q1 2024 timespan,” according to Justyna Zabinska-La Monica, the Conference Board’s senior manager of business cycle indicators.
Zabinksa-La Monica went on to say that “weak new orders, high-interest rates, a dip in consumer perceptions of the outlook for business conditions, and decreasing hours worked in manufacturing fueled the leading indicator’s” decline in July.
The coincident indicator, a gauge of present circumstances maintained by the Conference Board, rose in July, climbing by 0.4%.
“The CEI is signaling that we are currently still in a favorable growth environment,” Zabinska-La Monica also noted.
Last month, the index of trailing indicators, which is intended to show us how the economy has performed recently, remained steady.