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Economic Report: U.S. leading economic index pointing to recession around end of the year, Conference Board says

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The numbers: The leading economic index fell 0.8% in June, the U.S. Conference Board said Thursday.

Economists polled by The Wall Street Journal expected a 0.6% decline.

This is the fourth straight monthly decline.

The LEI is a weighted average of 10 indicators designed to show whether the economy is getting better or worse.

Key details: Consumer pessimism about the outlook drove the index down, along with falling stock prices, moderating labor market conditions and weak orders for manufacturers.

A measure of current economic conditions rose 0.2% in June for the second straight month.

The so-called lagging index rose 0.8%, matching the gain in May.

Big picture: The economy is clearly slowing down. Some economists think the best outcome would be a mild recession. Other economists point to the strong labor market and don’t think a recession is inevitable.

What the Conference Board said: “Amid high inflation and rapidly tightening monetary policy, The Conference Board expects economic growth will continue to cool throughout 2022. A U.S. recession around the end of this year and early next is now likely, said Ataman Ozyildirim, senior director of economic research at The Conference Board.

What outside economists are saying: “A fourth straight decline in the leading economic index does not guarantee recession, but it makes it harder to avoid,” said Tim Quinlan, senior economist at Wells Fargo.

Market reaction: Stocks
DJIA,
-0.31%

SPX,
+0.20%

opened lower on Thursday after strong gains earlier in the week. The yield on the 10-year Treasury note
TMUBMUSD10Y,
2.954%

tumbled on the weak economic data.

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