US likely to be in recession in Q3 2023-Q1 2024: The Conference Board

The LEI was down by 4.2 per cent over the six-month period between December 2022 and June 2023—a steeper rate of decline than its 3.8 per cent contraction over the previous six months.

The LEI offers an early indication of significant turning points in the business cycle and where the economy is heading in the near term.

The annual growth rate of the LEI remained negative, signalling continued slowing in economic activity.

“The US LEI fell again in June, fuelled by gloomier consumer expectations, weaker new orders, an increased number of initial claims for unemployment, and a reduction in housing construction,” said Justyna Zabinska-La Monica, senior manager for business cycle indicators at The Conference Board in a release.

“The Leading Index has been in decline for fifteen months—the longest streak of consecutive decreases since 2007-08, during the run-up to the Great Recession. Taken together, June’s data suggests economic activity will continue to decelerate in the months ahead,” she said.

“We forecast that the US economy is likely to be in recession from Q3 2023 to Q1 2024. Elevated prices, tighter monetary policy, harder-to-get credit, and reduced government spending are poised to dampen economic growth further,” she added.

The Conference Board coincident economic index (CEI) for the country remained unchanged in June at 110, after rising by 0.2 per cent in May. The CEI provides an indication of the current state of the economy.

The CEI is now up by 0.6 per cent over the six-month period between December 2022 and June 2023—down from the 1.1 per cent growth it recorded over the previous six months.

The Conference Board lagging economic index (LAG) for the country was also unchanged in June, at 118.4, after improving by 0.1 per cent in May.

The LAG is up slightly by 0.1 per cent over the six-month period from December 2022 to June 2023, down dramatically from its 3 per cent growth over the previous six months.

ALCHEMPro News Desk (DS)