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Fears of US Recession Amplify as Key Economic Indicators Show Downturn

Deteriorating economic signals point towards a looming US recession, the first since 2009, sparking concerns for American businesses and consumers.

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The US business cycles index registered a decline for the 15th consecutive month in June, a signal that has not been seen since the period preceding the 2007-2009 recession. The slump is primarily driven by a gloomier consumer outlook and a rise in unemployment claims.

The Conference Board's Leading Economic Index Records Continued Downturn

On Thursday, The Conference Board reported a 0.7% decline in its Leading Economic Index (LEI) for June, a figure that landed at 106.1 following a revised 0.6% drop in May. The fall slightly surpasses the median 0.6% decrease predicted by economists in a Reuters poll.

Economic Deceleration Expected to Persist, Experts Warn

"June's data indicates that the slowing down of economic activity is set to continue," expressed Justyna Zabinska-La Monica, the senior manager of business cycle indicators at The Conference Board. The organization maintains its forecast of a US recession commencing in the third quarter of the current year, lasting until the first quarter of 2024.

Future Economic Growth Threatened by Multiple Factors

Challenges like climbing prices, tightened monetary policy, restricted credit availability, and trimmed government spending could further hamper economic growth, warned Zabinska-La Monica.

Accelerating Contraction of the Leading Economic Index

The Conference Board revealed an accelerating contraction in the LEI, with a 4.2% fall recorded over the past six months, marking a more severe dip compared to the 3.8% decrease observed between June and December 2022.