U.S. Leading Economic Index Fell Again in July, Pointing to Downturn Ahead
18 Agosto 2022 - 11:40AM
Dow Jones News
By Maria Martinez
An economic index that measures U.S. business cycles decreased
in July for a fifth consecutive month, signaling a decline in
economic activity in the near-term.
The Leading Economic Index compiled by the Conference Board fell
0.4% to 116.6 in July from a revised 0.7% decline in June, data
from the private-research group showed Thursday.
Economists polled by The Wall Street Journal expected the index
to decrease by 0.5% in July.
The index suggests that recession risks are growing in the near
term, said Ataman Ozyildirim, senior director of economic research
at the Conference Board.
The Conference Board Leading Economic Index is a predictive
variable that anticipates turning points in the business cycle by
around seven months.
The indicator is based on 10 components, among them initial
claims for unemployment insurance, manufacturers' new orders,
building permits of new private housing units, stock prices, and
consumers expectations. It is intended to signal swings in the
business cycle and to smooth out some of the volatility of
individual indicators.
"Consumer pessimism and equity market volatility as well as
slowing labor markets, housing construction, and manufacturing new
orders suggest that economic weakness will intensify and spread
more broadly throughout the U.S. economy," Mr. Ozyildirim said.
The Conference Board expects the U.S. economy won't expand in
the third quarter and could tip into a short but mild recession by
the end of the year or early 2023.
The Coincident Economic Index--a measure of current economic
activity--increased 0.3% in July to 108.6, while the Lagging
Economic Index rose 0.4% to 114.4, The Conference Board said.
Write to Maria Martinez at maria.martinez@wsj.com
(END) Dow Jones Newswires
August 18, 2022 10:25 ET (14:25 GMT)
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