Weaker economic activity in the US is predicted for the near future, according to The Conference Board Leading Economic Index for the US, which fell 0.4% in May to a reading of 118.3. Separately, economists taking part in the Philadelphia Federal Reserve’s Livingston Survey downgraded their forecasts for US economic growth.
“The US [Leading Economic Index] fell again in May, fueled by tumbling stock prices, a slowdown in housing construction and gloomier consumer expectations,” said Ataman Ozyildirim, senior director of economic research at The Conference Board.
“The index is still near a historic high, but the US [Leading Economic Index] suggests weaker economic activity is likely in the near term — and tighter monetary policy is poised to dampen economic growth even further,” Ozyildirim added.
In the Livingston Survey, economists cut their forecasts for GDP growth in the first half of this year to 0.5% from their previous projection of 3.9%.
They also reduced the GDP growth forecast to 2.1% for the second half of this year from a previous forecast of 3.5%.
In addition, the Livingston survey forecasts consumer price index inflation will be 7.6% this year and 3.8% in 2023 — up from the previous forecast of 4.5% and 2.5%, respectively.
They expect producer price index inflation to be 13.2% this year and 4.2% next year — up from the previous forecasts of 6.3% and 2.2%, respectively.
On the other hand, the Livingston Survey economists lowered their projections for the US unemployment rate. They now expect the unemployment rate this month to be 3.6%, down from 4.0% in their previous survey. They also expect the December unemployment rate to be 3.4%, down from the last forecast of 3.8%.