{"id":2073923,"date":"2023-10-20T09:12:01","date_gmt":"2023-10-20T13:12:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/recession-drums-beat-louder-as-key-economic-indicator-falls-for-18th-straight-month\/"},"modified":"2023-10-20T11:27:43","modified_gmt":"2023-10-20T15:27:43","slug":"recession-drums-beat-louder-as-key-economic-indicator-falls-for-18th-straight-month","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/recession-drums-beat-louder-as-key-economic-indicator-falls-for-18th-straight-month\/","title":{"rendered":"Recession looms as vital economic indicator drops for 18th 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\">22<\/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-drums-beat-louder-as-key-economic-indicator-falls-for-18th-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=2073923&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><p>The recessionary drums are beating louder as\u2063 a key U.S. economic gauge from\u2063 The Conference Board dropped for the 18th consecutive month as the \u2062Federal \u200bReserve&#8217;s rate hikes in response to soaring \u200cinflation \u200bare taking their toll on the economy.<\/p>\n<p>The Leading Economic\u200d Index (LEI), which \u200cis a forward-looking gauge made\u200b up of 10 individual indicators, fell by 0.7 percent in \u200bAugust, The \u200dConference Board said on Oct. 19.<\/p>\n<p>The \u200dlatest reading\u2063 is worse than August&#8217;s 0.5 percent\u2062 decline and \u2063brings the\u2064 total six-month drop to 3.4 percent\u200c in the LEI \u200cmeasure, which is designed to predict business cycle \u2064shifts, \u2063including recessions.<\/p><\/blockquote>\n<h2>Related Stories<\/h2>\n<ul>\n<li>\n<h3>How Does\u200b a \u200cRecession Begin?<\/h3>\n<p>10\/5\/2023<\/li>\n<li>\n<h3>Recession Won\u2019t Damage\u200d Permanently but \u2062Inflation Will<\/h3>\n<p>9\/21\/2023<\/li>\n<\/ul>\n<p>All but one of the LEI&#8217;s 10 individual indicators were negative last month.<\/p>\n<p>\u201cIn\u200b September, negative\u2064 or flat contributions from nine of the index\u2019s 10 components more than offset fewer initial claims for unemployment insurance,\u201d \u200dJustyna Zabinska-La Monica, senior manager, Business Cycle Indicators, at\u200c The Conference Board, said in a statement.<\/p>\n<p>The labor market has remained tight \u200cdespite the fact that the Federal Reserve has been cooling the economy by hiking interest rates at its fastest pace since the 1980s\u200d in a desperate bid to quash high prices.<\/p>\n<h2>Waning Consumer Strength<\/h2>\n<p>With persistently high inflation\u2064 and a deteriorating economic \u2064outlook, September saw consumer confidence fall for the \u200bsecond consecutive month to \u200bhit a four-month low, according to The \u2062Conference Board.<\/p>\n<p>Expectations about the economic outlook over the next six months\u2062 also dropped below The Conference Board&#8217;s\u2063 recession threshold of 80,\u200d reflecting waning confidence about business conditions, job availability,\u200d and earnings.<\/p>\n<p>&#8220;Write-in responses showed\u200c that consumers continued to be preoccupied with rising prices\u2062 in general,\u200c and for groceries and gasoline in particular. Consumers also\u2063 expressed \u2062concerns about the political situation and higher interest rates,&#8221; Dana Peterson, \u2062chief economist at The Conference Board, said \u200cin a\u200b statement.<\/p>\n<p>All that consumer worry is\u2063 translating into reduced\u200d consumption, a big red flag as consumer\u2062 spending \u200dis a key \u2062driver of the U.S. economy, accounting for\u200d a whopping\u200b two-thirds of gross domestic product (GDP).<\/p>\n<p>Last week, the number of Americans filing new claims for unemployment fell to a nine-month low, \u2063indicating \u200bthat companies are reluctant to let workers go despite the presence of economic\u2064 headwinds.<\/p>\n<p>&#8220;Companies on earnings calls may\u2064 warn about the outlook and risks ahead, \u200bbut they are still holding on tight to their workers as good help is increasingly hard to find,&#8221; Christopher Rupkey, chief economist at\u2062 FWDBONDS in New York, told\u2062 Reuters.<\/p>\n<p>Commenting\u200c on The Conference Board&#8217;s latest downbeat economic \u200dsignals, Ms. Zabinska-La Monica warned of the &#8220;risk of economic weakness ahead&#8221; as the U.S. economy struggles to maintain momentum.<\/p>\n<p>&#8220;So far, the U.S. economy has shown\u2064 considerable resilience despite\u200b pressures from rising interest rates \u200band high inflation,&#8221; she said. &#8220;Nonetheless,\u2063 The Conference Board forecasts that this trend will not be sustained for much longer, \u200cand a shallow recession is\u200c likely\u200b in the first half of 2024.\u201d<\/p>\n<p>Many economists\u200b see a relatively high probability of a\u200c recession in\u200b the coming year, with signals like \u2062<a title=\"Fed minutes indicate one more rate hike followed by prolonged higher interest rates.\" href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-minutes-show-one-more-rate-hike-then-higher-interest-rates-for-some-time\/\">waning consumer confidence<\/a> an\u200d often-cited canary in the coal mine.<\/p>\n<p>Further Fed interest-rate hikes are also potentially on the horizon, as Federal Reserve Chair Jerome Powell told a \u2063conference on Oct. 19 that inflation remains stubbornly\u2064 high\u2063 and\u2062 that bringing it down to the central bank&#8217;s target of around 2\u2064 percent will likely require a slowdown in \u2063the economy and job\u2062 market.<\/p>\n<h2>Housing Market Strain<\/h2>\n<p>The U.S. housing market, for \u200bexample, is beginning to creak \u2064under the strain \u200dof high mortgage rates, which recently touched \u200d8 \u200dpercent.<\/p>\n<p>Two years ago, mortgage \u200crates were\u2063 hovering\u200c around 3 percent, with the sharp\u200d run-up having a dampening effect on loan demand.<\/p>\n<p>The Mortgage Bankers Association (MBA) said on\u200b Oct. 18 that mortgage application demand has plunged for the sixth consecutive week, to the lowest level since 1995.<\/p>\n<p>\u201cBoth purchase and refinance applications declined, driven by larger drops for conventional applications,&#8221; said\u2062 Joel \u2063Kan, MBA&#8217;s deputy chief\u2063 economist.<\/p>\n<p>&#8220;Purchase applications were 21 \u2064percent\u200d lower\u200b than the same week last year, as homebuying activity continues to\u200d pull \u2064back given <a title=\"Loan demand crushed as mortgage rates soar to 8%.\" href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-rates-hit-8-percent-crushing-loan-demand\/\">reduced purchasing power<\/a> from higher rates and the ongoing lack of available inventory,&#8221; he added.<\/p>\n<p>With home loan-borrowing costs at\u200c multi-decade highs and many \u2062<a title=\"Mortgage rates hit 23-year high, hurting homebuyer affordability.\" href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mortgage-rates-soar-to-23-year-high-in-fresh-blow-to-homebuyer-affordability\/\">potential home sellers<\/a> having locked in their mortgages at much lower rates, there are \u200ddual disincentives pushing \u2063down sales volumes.<\/p>\n<p>Mr. Simon said that after a\u200c long period of <a title=\"Former Walmart CEO warns that American consumers are nearing their limit.\" href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/ex-walmart-ceo-says-us-consumers-reaching-breaking-point\/\">cheap money cut short<\/a> by the Federal \u2062Reserve&#8217;s rapid\u200b rate\u2063 hikes in response to soaring inflation, consumers are now beginning to buckle.<\/p>\n<p>&#8220;Consumers had an incredible 10-, 12-year run,&#8221; he told CNBC&#8217;s &#8220;Fast Money&#8221; program. &#8220;Markets were buoyant. \u2064Interest rates were low. Money was\u200c available.&#8221;<\/p>\n<p>But with interest rates currently within the range of 5.25\u20135.5 percent, the era of \u2064cheap money has\u2062 come to an end\u2014and economic stresses are beginning \u200cto emerge.<\/p>\n<div class=\"post-figure\" style=\"margin-left: 0; margin-right: 0; max-width: 1200px;\">\n<figure class=\"alignnone\" style=\"width: 640px; margin-left: auto; margin-right: auto;\"><figcaption>A hiring sign is displayed at a retail store in Vernon Hills, Ill., on Aug. 31, 2023. (Nam Y. \u200dHuh\/AP Photo)<\/figcaption><\/figure>\n<\/div>\n<p>A recent survey carried\u200b out in September by CNBC-Morning Consult found that 92 percent of U.S. adults have cut back on spending over the past\u2064 six months.<\/p>\n<p>Looking\u2064 forward, over three-quarters of those polled said they \u2062plan to cut back on \u2063spending for non-essential items.<\/p>\n<div class=\"post-figure\" style=\"margin-left: 0; margin-right: 0; max-width: 1200px;\">\n<figure class=\"alignnone\" style=\"width: 640px; margin-left: auto; margin-right: auto;\"><figcaption>Bill Simon, then-president and CEO of Walmart, speaks at an event in\u200b Chicago, Ill., on\u200c June 14, 2013. (Scott Olson\/Getty Images)<\/figcaption><\/figure>\n<\/div>\n<p>Former Walmart CEO Bill Simon said in an\u200c interview \u200don CNBC recently that a series of\u200b factors\u2014political polarization,\u200b inflation, and \u200chigh interest rates\u2014were all working together to undermine consumers and their\u2064 propensity to spend.<\/p>\n<p>\u201cThat sort of pileup wears on the consumer and makes them wary,\u201d Mr. Simon told the outlet. \u201cFor\u200c the first time in a long time, there\u2019s a reason for the consumer to pause.\u201d<\/p>\n<p>\u00a0<\/p>\n<h2>How are higher interest \u2062rates and limited inventory impacting the \u200chousing market and discouraging potential homebuyers?<\/h2>\n<p>Gage \u200brates at lower levels, the housing market\u2064 is facing headwinds. The combination of higher interest rates and \u200climited inventory is discouraging potential \u2064homebuyers, resulting in\u200c a decline in mortgage\u200b applications.<\/p>\n<p>The housing\u200d market is a critical component \u2064of the \u200dU.S. economy, as it drives demand \u200dfor construction, home improvement, and various other \u200dindustries. A\u200b slowdown\u200c in the housing market can have far-reaching implications and is often seen as a\u200b warning sign of an economic downturn.<\/p>\n<p>The latest data from\u2064 The Conference \u200dBoard \u200don\u2064 the \u200dLeading\u2064 Economic\u200c Index (LEI) further reinforces concerns about the economy. The LEI, which is\u200c a forward-looking gauge of economic \u200dactivity, declined \u2062by 0.7 percent\u2064 in August, marking the 18th consecutive monthly drop. This decline is worse than the \u200dprevious month and brings \u2062the six-month\u2062 drop to 3.4 percent, \u200cindicating a deteriorating \u200deconomic outlook.<\/p>\n<p>One of\u200d the main \u2062drivers of the \u200deconomic weakness is the Federal Reserve&#8217;s response\u2062 to high inflation. The \u200bcentral bank \u200dhas been raising interest rates \u2062at\u200d the fastest pace \u200dsince the 1980s \u2062in\u2063 an effort \u2063to curb rising prices. However, these rate hikes \u200bare starting to take\u2064 a toll on the economy. The labor market remains \u200dtight, despite the \u2062cooling measures, suggesting that the rate hikes are not having the desired \u2064effect.<\/p>\n<p>Consumer confidence is also waning,\u2064 with expectations \u2064about the \u200deconomic outlook dropping below the recession threshold. Consumers are\u200c increasingly concerned about rising prices, particularly \u200cfor groceries\u2064 and gasoline. These \u200dworries are leading to reduced\u2062 consumption,\u2063 which\u200c is a \u200dsignificant concern\u200c as consumer spending drives \u200dtwo-thirds\u200b of the U.S. economy.<\/p>\n<p>The ongoing economic weakness has raised concerns about the risk of a\u2062 recession in the coming year. Many \u2064economists\u2064 see a \u200drelatively\u2063 high probability of a recession, with indicators like <a title=\"Recession looms as vital economic indicator drops for 18th consecutive month.\" href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/recession-drums-beat-louder-as-key-economic-indicator-falls-for-18th-straight-month\/\">waning\u200c consumer \u200dconfidence \u2062signaling potential\u2064 trouble ahead<\/a>.<\/p>\n<p>In addition \u2064to\u2062 these challenges,\u200b the housing market\u200b is also feeling the strain. \u2063High mortgage \u200brates, which\u2062 have recently reached 8 \u2063percent, are\u2063 impacting loan\u200b demand. Mortgage application demand has\u200d plunged for \u2062the sixth\u2063 consecutive week,\u200b reaching the lowest level \u200bsince 1995. \u2062With borrowing costs \u200dat multi-decade highs, potential homebuyers are facing reduced purchasing power, \u2062further dampening homebuying activity.<\/p>\n<p>The \u2062combination of economic\u200d weakness, waning consumer strength, \u2063and a \u200bstrained housing\u2062 market poses significant challenges for the\u2062 U.S. economy. While the economy has shown resilience\u200b thus far, there are growing concerns \u2063that this \u2062trend will not be sustained\u200b for much \u200blonger. The Conference Board forecasts \u2063a shallow recession in \u200bthe first half \u200dof 2024.<\/p>\n<p>Addressing these challenges will require careful policy considerations. Further Federal Reserve interest-rate hikes\u2063 may be necessary to tackle inflation, but \u200bthey also risk\u200c exacerbating economic weakness. Policymakers \u200bwill\u200b need to find a \u2064delicate balance between managing inflation and supporting \u2064economic \u200bgrowth.<\/p>\n<p>In conclusion, the\u2062 recent data on the U.S. economy and \u200bhousing market indicate growing \u2064concerns\u2063 about a possible recession. The Federal Reserve&#8217;s \u2064rate hikes and high inflation are taking a \u2062toll \u200don\u200d the economy, leading to reduced consumer confidence and a strained\u200c housing market. Policymakers will need to navigate these challenges carefully to \u2064ensure \u200bthe stability and \u200dgrowth of the U.S. economy in the coming months.<\/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 18th straight month. The Federal Reserve&#8217;s rate hikes, aimed at curbing inflation, are negatively impacting the economy. The LEI, consisting of 10 indicators, serves as a predictive measure for future economic trends.<\/p>\n","protected":false},"author":118,"featured_media":2073924,"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":"Recession looms as vital economic indicator drops for 18th consecutive month.","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2073923","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","fifu_image_alt":"Recession looms as vital economic indicator drops for 18th consecutive month.","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2073923","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=2073923"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2073923\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2073924"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2073923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2073923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2073923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}