US leading index falls for 14th month, signaling weaker economic activity in future

By Ovunc Kutlu

ISTANBUL (AA) - The Leading Economic Index in the US declined for the 14th consecutive month in May, as it continues pointing to weaker economic activity in future, New York-based research group The Conference Board said in a statement Thursday.

The index, which provides early indication of important turning points in the business cycle and where the economy is heading in the near-term, declined by 0.7% in May 2023 to 106.7, after falling 0.6% in April.

It is down 4.3% over the six-month period between November 2022 and May 2023, while this a steeper rate of decline than 3.8% contraction over the previous six months from May to November 2022, the group said.

Justyna Zabinska-La Monica, a senior manager at the group's business cycle indicators, said the decline is a result of "deterioration in the gauges of consumer expectations for business conditions," a negative yield spread and worsening credit conditions.

"Rising interest rates paired with persistent inflation will continue to further dampen economic activity," she said, adding the group projects American economy to contract over the period between the third quarter of 2023 and the first quarter of 2024.

"The recession likely will be due to continued tightness in monetary policy and lower government spending," she added.