{"id":2040396,"date":"2023-09-21T17:31:01","date_gmt":"2023-09-21T21:31:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/recession-signals-intensify-as-key-economic-gauge-drops-for-17th-straight-month\/"},"modified":"2023-09-21T17:35:11","modified_gmt":"2023-09-21T21:35:11","slug":"recession-signals-intensify-as-key-economic-gauge-drops-for-17th-straight-month","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/recession-signals-intensify-as-key-economic-gauge-drops-for-17th-straight-month\/","title":{"rendered":"Recession signals worsen as vital economic gauge falls for 17th consecutive month."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Frecession-signals-intensify-as-key-economic-gauge-drops-for-17th-straight-month%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2040396&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>The Recessionary Drums are Beating Louder<\/h2>\n<p>The recessionary \u2062drums are beating louder as a key U.S. economic gauge from the\u200c Conference \u200bBoard dropped for the 17th consecutive month,\u200c with a major factor being the Federal Reserve&#8217;s aggressive\u2064 rate hikes.<\/p>\n<\/blockquote>\n<div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<p>The Leading Economic Index (LEI), which is a forward-looking gauge that includes\u200c 10\u2064 individual indicators, fell\u200d by 0.4\u2064 percent in August, the Conference Board <a href=\"https:\/\/www.conference-board.org\/topics\/us-leading-indicators\" target=\"_blank\" rel=\"noopener\">said on Sept. 21<\/a>.\u2062 The latest reading brings the total six-month drop to 3.9 percent in the LEI measure, which\u200b is \u2064designed to predict business cycle shifts, including recessions.<\/p>\n<p>\u201cWith August\u2019s decline, the US Leading\u200b Economic Index has now \u200dfallen for nearly a year and\u200b a half straight, \u200cindicating the economy is heading into a \u2064challenging growth\u2064 period and\u2064 possible recession over \u200bthe next year,\u201d Justyna Zabinska-La Monica, senior manager, Business Cycle Indicators, \u200bat The \u2062Conference Board, said in \u200da statement.<\/p>\n<blockquote>\n<h3>Related Stories<\/h3>\n<ul>\n<li><a href=\"http:\/\/www.theepochtimes.com\/article\/labor-market-cools-as-job-openings-drop-manufacturing-recession-deepens-5435604?ea_src=author_manual&#038;ea_med=related_stories\"><strong>Labor \u200cMarket Cools as Job Openings \u200bDrop, Manufacturing Recession Deepens<\/strong><\/a>  &#8211; 8\/1\/2023<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/bright\/how-would-a-recession-affect-me-and-my-finances-5424035?ea_src=author_manual&#038;ea_med=related_stories\"><strong>How\u200c Would a Recession Affect Me and My Finances?<\/strong><\/a>  -\u200b 7\/26\/2023<\/li>\n<\/ul>\n<\/blockquote>\n<p>She said that the leading index was negatively impacted by weak new orders, deteriorating consumer expectations for future business conditions,\u2064 tighter credit conditions, and \u2064the\u200d Federal Reserve&#8217;s\u200c aggressive rate hikes.<\/p>\n<p>&#8220;All these factors suggest\u200b that going forward economic activity probably will decelerate and experience a\u2064 brief but mild contraction,&#8221; she said.<\/p>\n<p>The Conference Board expects gross\u200d domestic \u2063product (GDP) to expand \u2062by 2.2 percent in 2023, and then fall \u200dto 0.8 \u200dpercent \u2062in 2024. <\/p>\n<h2>Double-Dip Recession?<\/h2>\n<p> The country has been on recession watch for some time, with some analysts arguing that America fell into a \u200drecession \u200dlast year\u2014and is due for another one.<\/p>\n<div class=\"shortcode post-related-videos\">\n<div class=\"lazyload-wrapper\">\n<div class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<\/div>\n<p>The first two quarters of \u20622022 saw\u2063 America&#8217;s economic output contract \u2063at a 1.6 percent annual rate in the \u2064January-March\u200b quarter and at a 0.6\u2064 percent annual rate from April through June.<\/p>\n<p>By one common definition of recession (two consecutive quarters of\u2064 negative growth), that would mean the\u200b United States\u200b fell into a downturn.<\/p>\n<div class=\"my-5\">Currently, the Atlanta Fed&#8217;s <a href=\"https:\/\/www.atlantafed.org\/cqer\/research\/gdpnow\" target=\"_blank\" rel=\"noopener\">GDP nowcast<\/a>, a real-time estimate \u200dof economic growth, sees the economy expanding at a 4.9 percent clip in the third quarter\u2063 of 2023, \u2064seemingly \u200ba far cry from \u2064recession territory.<\/div>\n<div class=\"my-5\">Economic analyst Mike &#8220;Mish&#8221; Shedlock,\u200b <a href=\"https:\/\/mishtalk.com\/\" target=\"_blank\" rel=\"noopener\">whose\u2063 blog<\/a> has been <a href=\"https:\/\/content.time.com\/time\/business\/article\/0,8599,1873144-3,00.html\" target=\"_blank\" rel=\"noopener\">listed among<\/a> Time magazine&#8217;s top\u2062 25 financial blogs, \u2063told The Epoch Times\u200d in an interview that \u2064he sees a double-dip recession coming.<\/div>\n<p>A double-dip \u2063recession is where a downturn is \u200bfollowed by a brief\u2063 gasp of recovery\u2014before turning negative and once again falling \u200cinto\u200b a recessionary zone.<\/p>\n<p>&#8220;We&#8217;ve never had indicators like that, for this long, without the economy being in recession. Period,&#8221; Mr. Shedlock said when\u200b asked \u200bfor \u2063comment \u2063on the latest leading economic indicators\u2064 from\u200b The Conference Board, adding that he believes many economists \u200dsee the writing on the\u200c wall\u200d pointing\u200c to a contraction but &#8220;they&#8217;re afraid \u200bto say it right now.&#8221;<\/p>\n<div class=\"my-5\">Mr. Shedlock \u2064pointed\u200b to an alternative measure called GDPplus, <a href=\"https:\/\/www.philadelphiafed.org\/the-economy\/macroeconomics\/131104-bank-introduces-new-measure-of-gdp\" target=\"_blank\" rel=\"noopener\">developed<\/a> \u2064about a decade ago by economists at the \u2064Philadelphia Fed, which \u200cincorporates an underused measure called <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/janet-yellen-we-have-experienced-one-of-the-quickest-economic-recoveries-in-our-modern-history\/\" title=\"Janet Yellen: \u2018We Have Experienced One Of The Quickest Economic Recoveries In Our Modern History\u2019\">gross domestic income<\/a> (GDI) in its\u200d real-time estimate of economic activity.<\/div>\n<p>&#8220;Around recessions, gross domestic income is \u200doften the far better of the two measures,&#8221; he said.<\/p>\n<p>The Philly Fed&#8217;s numbers, which show quarter-over-quarter \u200crates \u200dof growth, indicate that GDI was negative for the fourth quarter of\u200b 2022 (-3.4\u200c percent) and the \u200bfirst quarter of 2023 (-1.8 \u200dpercent),\u200c before turning positive (0.5 percent)\u200c in the second quarter\u2062 of 2023.<\/p>\n<p>When examining the Philly Fed&#8217;s \u200dnumbers and other data, Mr. Shedlock said he sees another recession ahead.<\/p>\n<div class=\"my-5\">&#8220;I think it&#8217;s possible we were\u2062 in recession,\u2063 and\u2064 are\u200d coming\u200b out of\u2063 it now, and\u2064 are\u2063 going to head back into a double-dip\u200b recession&#8221; later this \u2062year, he said. <\/p>\n<h2>&#8216;A Crash Is\u200d Underway&#8217;<\/h2>\n<p> \u2063Data from the housing market, traditionally one of the last \u2064to turn over \u2062in a recession, has\u200b also flashed warning \u200csigns.<\/p><\/div>\n<div class=\"my-5\">The National Association \u200bof Realtors \u2062(NAR) <a href=\"https:\/\/www.nar.realtor\/newsroom\/existing-home-sales-decreased-0-7-in-august\" target=\"_blank\" rel=\"noopener\">reported on Sept. 21<\/a> that <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/stocks-suffered-their-worst-day-of-the-year-on-tuesday\/\" title=\"Stocks Suffered Their Worst Day of the Year on Tuesday\">existing home sales fell 0<\/a>.7 percent in \u2064August.\u2064 In year-over-year \u2064terms, \u2062sales slumped \u206415.3\u200c percent.<\/div>\n<p>At the\u2062 same time, the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/recession-signals-intensify-as-key-economic-gauge-drops-for-17th-straight-month\/\" title=\"Recession signals worsen as vital economic gauge falls for 17th consecutive month.\">median existing-home sales price climbed 3<\/a>.9 percent from one year ago to $407,100, which is the third consecutive \u200cmonth of\u200d prices breaking above $400,000.<\/p>\n<p>Commenting on the sharp decline in transactions without a corresponding collapse in house prices, Mr. Shedlock said it&#8217;s an unusual dynamic and blamed the Fed&#8217;s\u2062 easy money policies for introducing\u2064 market\u2063 distortions.<\/p>\n<p>&#8220;I&#8217;ve never seen one\u2062 before where we&#8217;ve had \u2064a \u200dtransaction \u2062crash without a \u200bprice crash,&#8221; he said. &#8220;But \u200bthis is what the Fed has produced.&#8221;<\/p>\n<p>He expects the situation to stay that way\u200c as long as the Fed keeps interest rates high. Mr. Shedlock blamed the Fed for ignoring\u200b obvious inflation signals and keeping\u200d its foot on\u200d the\u2063 monetary gas\u200d pedal by continuing with its asset-buying program\u200d known as quantitative easing\u2014and by keeping interest rates at near zero\u2063 for too long.<\/p>\n<p>The Fed overlooked building pressure in house prices in part because the standard measure of inflation, the\u200b Consumer Price \u200cIndex (CPI),\u200c doesn&#8217;t directly capture home prices but uses rent and something called owners&#8217; equivalent rent, which \u200bis what people who \u200down their \u200dhome would pay if \u2064they had to \u200drent\u200d it.<\/p>\n<p>&#8220;So ignoring all \u2064that\u200c was \u200bignoring inflation,&#8221; he\u200b said, adding \u200cthat \u200cwhen the pandemic hit, the Fed ignored all the bubbles its free-wheeling \u2063monetary policies created and slashed interest rates.<\/p>\n<p>&#8220;It&#8217;s a dilemma the Fed has made,&#8221; he said.<\/p>\n<div class=\"my-5\">In\u200c a recent <a href=\"https:\/\/mishtalk.com\/economics\/existing-home-sales-decline-17-of-last-19-months-yes-this-is-a-crash\/\" target=\"_blank\" rel=\"noopener\">post on his blog<\/a>, Mr. Shedlock\u200d wrote that &#8220;real estate tooters keep\u2062 telling me there is no crash&#8221; but the \u2064numbers point to a \u200cdifferent reality.<\/div>\n<p>&#8220;Despite denials in many corners, a crash \u200cis underway,&#8221;\u2063 he\u200b wrote.<\/p>\n<div class=\"my-5\">Meanwhile, \u200bFed policymakers <a href=\"https:\/\/www.theepochtimes.com\/article\/fed-holds-rates-steady-but-projects-one-more-hike-this-year-5495325\" target=\"_blank\" rel=\"noopener\">voted to leave<\/a> interest\u200d rates unchanged\u2062 at the latest Federal Open Market Committee (FOMC) \u200cpolicy meeting this\u2064 week. With their vote, \u200dthey decided to\u200c maintain the\u200d benchmark fed funds rate\u200b at a range of 5.25 percent to 5.5 percent, the highest \u200din 22 years.<\/div>\n<p>At the \u200bsame \u200ctime,\u2063 Fed officials left the\u2063 door open for \u2062one\u200b more rate increase before the end of the\u200c year and indicated smaller rate cuts in 2024.<\/p>\n<p>FOMC members noted that U.S. economic activity\u200c had been growing\u2064 at a &#8220;solid pace&#8221; and that \u2064&#8221;inflation remains elevated.&#8221;<\/p>\n<\/div>\n<p> <\/p>\n<h2> \u200c How has the Federal Reserve&#8217;s\u2064 aggressive rate hikes affected businesses, \u200bconsumers, and the\u2064 overall economy?<\/h2>\n<p><span>  R&#8221;>GDPNow<\/a> model, which provides a \u2063real-time estimate of \u2063GDP growth, is projecting a 0.2 \u200cpercent growth rate for the\u2062 third \u2063quarter of 2023.<\/div>\n<p>There\u200b are several factors contributing to the\u200c growing concerns of\u200c a recession. One \u2063of the main factors is the Federal Reserve&#8217;s aggressive rate hikes,\u200b which have been \u2064aimed at \u2064preventing inflation from \u2062spiraling\u2062 out of control. While these \u2063rate hikes have \u2062been\u200d successful in curbing\u2062 inflation, they have also been putting pressure on businesses, consumers, and the overall economy.<\/p>\n<p>The Federal Reserve has been\u2062 gradually increasing interest rates since 2022,\u2062 with the goal \u2063of \u200bnormalizing monetary policy after \u2063years of near-zero rates following the \u2062global financial crisis. However, these rate \u2062hikes have made borrowing more\u2062 expensive for businesses and consumers, which has\u2063 led to decreased spending \u200band investment. This, in turn, \u2062has slowed down economic growth and increased\u2063 the risk of a recession.<\/p>\n<p>Another factor impacting the economy\u2062 is the decline in \u200dnew orders and\u2064 consumer expectations. Weak new\u2063 orders indicate\u2064 a decrease \u200din demand for \u2064goods\u2063 and services, which\u2064 can lead to \u2062decreased\u2064 production and job \u200bcuts.\u2064 Deteriorating\u200c consumer expectations \u2063for\u200b future business conditions \u200ccan also result in reduced consumer spending, \u200bfurther dampening \u200ceconomic growth.<\/p>\n<p>Tighter credit conditions are also contributing to the \u200ceconomic\u2062 slowdown. As interest rates rise,\u200b it becomes more difficult for businesses and individuals to obtain credit, which \u200ccan hamper investment and spending. This \u200ctightening of credit conditions can \u2062create a negative\u2064 feedback \u200cloop, as reduced spending and investment lead\u200c to \u2062slower economic\u2064 growth, which, in \u2063turn, can make it even more difficult for businesses and individuals to obtain credit.<\/p>\n<p>The Conference Board&#8217;s leading economic index provides valuable \u2062insights into the future direction \u200cof the economy. The index is designed to predict business cycle\u2063 shifts, including recessions. Its continuous\u200d decline over the past year and a half suggests that \u200bthe economy is\u2064 heading into \u2063a challenging \u200bgrowth period and a possible recession \u200dover the\u2063 next year.<\/p>\n<p>While the Conference Board expects GDP to expand by 2.2 percent in 2023, it also\u2062 predicts a significant\u200d contraction in 2024, with GDP growth slowing down to 0.8\u2064 percent. This\u2064 projection\u200d further supports \u200bthe concerns of a possible double-dip recession, with some \u2062experts arguing that the country may have already entered a recession in\u200d the previous year.<\/p>\n<p>It is important to \u200dnote that \u2064the economy is \u200cinfluenced by various factors, \u200dboth domestic \u200band international, \u2064and\u200c predicting its trajectory with certainty is challenging. \u200cHowever, the recent decline in the\u200b Conference\u200d Board&#8217;s leading economic index, coupled with other indicators pointing towards a possible economic slowdown, is a cause for concern.<\/p>\n<p>Policy decisions, such as the Federal Reserve&#8217;s handling\u200d of interest rates, will play \u200ca crucial role\u2063 in shaping the economy&#8217;s path \u2062in the coming months. Finding\u200b the right \u2064balance \u2063between curbing inflation and \u2063supporting economic growth will be\u2062 crucial to avoid a protracted period of\u2063 stagnation or recession.<\/p>\n<p>As \u200cthe recessionary drums beat\u2064 louder, policymakers, businesses, \u200band \u2063consumers should closely monitor the \u200bevolving \u2064economic\u2062 indicators and \u200dbe prepared \u2063to adapt to changing conditions. \u2064It \u200bis\u200d essential to \u200btake \u200dproactive measures to mitigate the potential impacts \u200cof a \u2064recession and ensure the long-term stability and growth of \u200cthe economy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US economy faces increasing recession fears as the Conference Board&#8217;s Leading Economic Index (LEI) dropped for the 17th straight month. The Federal Reserve&#8217;s aggressive interest rate hikes played a significant role in this decline. The LEI, a forward-looking indicator comprising 10 factors, fell by 0.4% in August.<\/p>\n","protected":false},"author":118,"featured_media":2040397,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2040396","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2040396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/118"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2040396"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2040396\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2040397"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2040396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2040396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2040396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}