Closely monitored indicators of economic activity show that the US is likely to slip into recession this year.
The Conference Board’s leading economic index, which integrates several indicators of economic development, fell in December, falling for the 10th straight month. Several indicators pulled the index down, including shorter average employee hours, fewer manufacturing orders, and lower consumer expectations.
Economists at Oxford Economics said the index had fallen 4.2% over the past six months. It was the fastest decline in six months since the pandemic began and “continues to give ominous signs about the near-term outlook for the economy,” it said. research notes.
The decline suggests “the economy is headed for recession,” they wrote. Oxford expects the recession to start between April and June of this year.
The Conference Board data is in line with other recent surveys, including those from the National Association for Business Economics, which also show that most economists expect a recession later this year.
Some investors hope policymakers can achieve their goal of containing inflation without sending the economy into recession. The actions of the Federal Reserve at its next meeting will have a big impact on whether the economy soft-lands or collapses.
After the Fed hiked its rates seven times last year, many investors expect the central bank to raise the federal funds rate just once before stopping. Some even expect the Fed to cut rates if the economy slows too much.
“The Federal Reserve is likely to scale back rate hikes at its upcoming meeting in response to slowing economic activity. If economic activity slows significantly, the Fed is likely to reconsider its rate hold plan for the second half of this year, meeting investor expectations that the Fed could cut rates until December,” economists at LPL Financial said. said in the report.
The LPL said the U.S. economy was still in recession, citing figures that showed inflation had fallen sharply, the U.S. job market remained strong, there were more vacancies than workers and wages continued to rise. pointed out that it narrowly avoids