The numbers: The leading economic index fell 0.8% in June, the U.S. Conference Board said Thursday. Economists polled by The Wall Street Journal expected a 0.6% decline. This is the fourth straight monthly decline.
The LEI is a weighted average of 10 indicators designed to show whether the economy is getting better or worse. Key details: Consumer pessimism about the outlook drove the index down, along with falling stock prices, moderating labor market conditions and weak orders for manufacturers. A measure of current economic conditions rose 0.2% in June for the second straight month. The so-called lagging index rose 0.8%, matching the gain in May. Big picture: The economy is clearly slowing down. Some economists think the best outcome would be a mild recession. Other economists point to the strong labor market and don’t think a recession is inevitable. What the Conference Board said: “Amid high inflation and rapidly tightening monetary policy, The Conference Board expects economic growth will continue to cool throughout 2022. A U.S. recession around the end of this year and early next is now likely, said Ataman Ozyildirim, senior director of economic research at The Conference Board. What outside economists are saying: “A fourth straight decline in the leading economic index does not guarantee recession, but it makes it harder to avoid,” said Tim Quinlan, senior economist at Wells Fargo. Market reaction: Stocks
opened lower on Thursday after strong gains earlier in the week. The yield on the 10-year Treasury note
tumbled on the weak economic data.