• Conference Board measure fell 0.3% in January after 0.8% drop
  • Decrease was led by weaker expectations and factory orders

An index of US leading economic indicators fell in January for a 10th straight month, reflecting declines in consumer expectations and factory orders that underscore risks of a recession. 

The Conference Board’s measure of the economic outlook for the next three to six months decreased 0.3% in January following a 0.8% decline a month earlier, the New York-based research group said Friday. The gauge is down 3.6% over the last six months. 

Six of the 10 indicators of the composite gauge, led by a deteriorating outlook for bookings at manufacturers, weaker consumer views of the business environment and worsening credit conditions. Those declines more than offset robust indicators of the job market.

“The Conference Board still expects high inflation, rising interest rates and contracting consumer spending to tip the US economy into recession in 2023,” Ataman Ozyildirim, senior director for economics at the Conference Board, said in a statement.

The measure is in the midst of its longest streak of declines since 2009 as steep interest-rate hikes by the Federal Reserve to fight persistently elevated inflation began to spread across the economy. Sectors including housing and manufacturing have been eroding fast and layoffs have picked in certain overheated industries like technology and banking.

But while many economists have been warning that the central bank’s most aggressive tightening campaign in decades could eventually tip the US into a recession, a recent slew of strong data suggests the economy is continuing to expand.

Retail sales spiked in January after a weak close to 2022, and the unemployment rate dropped to a 53-year low last month.

The Conference Board’s coincident economic index, a measure of current economic activity, rose 0.2%. The measure is determined by metrics including industrial production, sales, payrolls and incomes — the indicators used by the National Bureau of Economic Research to determine the beginning and end of US business cycles.

Written by:  @Bloomberg.com

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