The Conference Board’s US Leading Economic Index in April pointed to weaker growth ahead but did not signal a recession. The measure contracted 0.6% in April to 101.8 after decreasing by 0.3% in March.
“Another decline in the US LEI confirms that softer economic conditions lay ahead,” Justyna Zabinska-La Monica, senior manager, business cycle indicators at The Conference Board, said in a press release.
Consumers’ waning optimism about business conditions, a decline in new business permits and a negative yield spread were among the factors that led to April’s slide, Zabinska-La Monica added.
However, for the second consecutive month, the index did not signal a recession because of an improvement in the six-month growth rate. In the six-month period between October 2024 and April 2024, the index contracted by 1.9%, a smaller decrease than its 3.5% decline over the previous six months.
“While the LEI’s six-month and annual growth rates no longer signal a forthcoming recession, they still point to serious headwinds to growth ahead,” Zabinska-La Monica said. “Indeed, elevated inflation, high interest rates, rising household debt, and depleted pandemic savings are all expected to continue weighing on the US economy in 2024.”
The Conference Board now expects US real GDP growth will slow to under 1% over the second-quarter to third-quarter period.