U.S. economy headed for difficulty, leading index signals

Published: March 17, 2023 at ten:12 a.m. ET

The numbers: The U.S. leading economic index fell .3% in February — the 11th decline in a row — and continued to signal an upcoming recession.

Economists polled by The Wall Street Journal had forecast a .4% drop.

The LEI is a gauge of ten indicators produced to show regardless of whether or not the economy is obtaining far greater or worse. The report is published…

The numbers: The U.S. leading economic index fell .3% in February — the 11th decline in a row — and continued to signal an upcoming recession.

Economists polled by The Wall Street Journal had forecast a .4% drop.

The LEI is a gauge of ten indicators produced to show regardless of whether or not the economy is obtaining far greater or worse. The report is published by the nonprofit Conference Board.

Substantial image: The economy has slowed due to the finish of pandemic stimulus and the effects of greater inflation, which has forced the Federal Reserve to raise interest rates.

Bigger borrowing charges frequently tame inflation, but at the cost of a weaker economic improvement.

In spite of the truth that the leading index has been signaling a recession for months, the economy is nonetheless expanding. A big query is regardless of whether or not the most current banking crisis ends up becoming a tipping point. So far regulators appear to have contained the harm.

Vital data: Eight of the ten indicators tracked by the Conference Board fell in February.

A measure of present economic situations, meanwhile, rose a scant .1% in February.

The so-referred to as lagging index — a seem in the rearview mirror — also elevated by .1%.

Looking for ahead: “The leading economic index nonetheless points to danger of recession in the US economy,” stated Justyna Zabinska-La Monica, senior manager of smaller business enterprise cycle indicators at the board. ” The most existing monetary turmoil in the U.S. banking sector is not reflected in the LEI data but could have a unfavorable impact on the outlook if it persists.”

Marketplace reaction: The Dow Jones Industrial Common

DJIA

and S&ampP 500

SPX

fell in Friday trades amid nagging worries about the U.S. monetary approach suitable soon after the failure of Silicon Valley Bank.