U.S. Leading Economic Index Declines For Fourteenth Straight Month In May

(RTTNews) - A reading on leading U.S. economic indicators decreased in line with economist estimates in the month of May, the Conference Board revealed in a report released on Thursday.

The Conference Board said its leading economic index slid by 0.7 percent in May after falling by 0.6 percent. The continued slump matched expectations.

"The U.S. LEI continued to fall in May as a result of deterioration in the gauges of consumer expectations for business conditions, ISM® New Orders Index, a negative yield spread, and worsening credit conditions," said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.

She added, "The U.S. Leading Index has declined in each of the last fourteen months and continues to point to weaker economic activity ahead."

Meanwhile, the report said the coincident economic index edged up by 0.2 percent in May after rising by 0.3 percent in April.

The Conference Board noted recent data for industrial production have contributed negatively to coincident index, while sales, employment, and income growth remained positive.

The report said the lagging economic index also inched up by 0.1 percent in May after slipping by 0.1 percent in April.

"Rising interest rates paired with persistent inflation will continue to further dampen economic activity," said Zabinska-La Monica.

"While we revised our Q2 GDP forecast from negative to slight growth, we project that the US economy will contract over the Q3 2023 to Q1 2024 period," she added. "The recession likely will be due to continued tightness in monetary policy and lower government spending."