BNR – One of the indexes created to monitor business cycles in the United States has dropped 15 times in June, indicating a potential recession. A fragile customer prospect has led to the index’s drop and raised the number of individuals requiring unemployment benefits.
The multiple drops were the most significant in the country since the events before the Great Recession of 2007-2009.
Conference Board, a non-profit, stated that the Leading Economic Index (LEI) fell to 106.1 last month, accounting for 0.7%. The drop followed another drop of 0.6% in May. LEI is a measuring system that projects the economy’s activities.
The drop was sharper than the average projections of economy experts, according to a Reuters poll.
Among the experts is Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board. “Taken together, June’s data suggests economic activity will continue to decelerate in the months ahead,” she stated.
Possible Recession by Q3-Q4
The non-profit asserted its projections that the United States economy may be in recession from the current Q3-Q4 2024.
“Elevated prices, tighter monetary policy, harder-to-get credit, and reduced government spending are poised to dampen economic growth further,” Zabinska-La Monica said.
Zabinska-La Monica said that several factors may affect economic development. This includes, according to the expert, “elevated prices, tighter monetary policy, harder-to-get credit, and reduced government spending.”
The non-profit confirmed the contraction in the Leading Economic Index is speeding up. It is dropping 4.2% over the past six months in comparison to 3.8% between June and December 2022.