(DCWatchdog.com) – The already embattled US economy operating under President Joe Biden and the respective plight of “Bidenomics” for close to three years now may be about to get much worse since a key indicator is pointing in the direction of a new large-scale recession.
The US economy is facing a significant downturn, as suggested by the persistent decline of a crucial economic indicator, which has decreased for the 19th consecutive month, Breitbart News reports, citing a release by the Conference Board, a business research nonprofit.
In a new announcement on Monday, the Conference Board said the Leading Economic Index (LEI), a measure predicting the economy’s trajectory, saw a 0.8% decrease in October.
This index is composed of 10 components that traditionally serve as harbingers for the direction of the economy.
Contrary to the expectations of some economists who anticipated a milder decline, the reduction matched their forecast of 0.8%.
This sustained downward trend in the LEI has not been observed since the Great Recession, during which the index experienced a similar decline from the end of 2007 through 2009.
Despite the ongoing decrease, there is a silver lining: the rate of decline in the index has decelerated, Breitbart notes.
Between April and October 2023, the LEI contracted by 3.3%, which, while significant, is less severe than the 4.5% contraction witnessed in the preceding six months.
Justyna Zabinska-La Monica, Senior Manager of Business Cycle Indicators at The Conference Board, highlighted key factors contributing to this decline.
“The US LEI trajectory remained negative, and its six- and twelve-month growth rates also held in negative territory in October,” she stated.
“Among the leading indicators, deteriorating consumers’ expectations for business conditions, lower ISM Index of New Orders, falling equities, and tighter credit conditions drove the index’s most recent decline,” the analyst explained.
The LEI is currently pointing towards an imminent recession, though it is expected to be a mild one.
“After a pause in September, the LEI resumed signaling recession in the near term,” Zabinska-La Monica noted.
The Conference Board anticipates that a combination of factors such as high inflation, elevated interest rates, and diminishing consumer spending will contribute to this recession.
In terms of economic growth, the forecast is modest.
“We forecast that real GDP will expand by just 0.8% in 2024.” This projection suggests that the US economy is bracing for a period of minimal growth,” Zabinska-La Monica elaborated.