The numbers: The leading economic index fell 0.4% in August and declined for the 17th month in a row, but there’s still no sign the U.S. is headed for a recession.
Economists polled by the Wall Street Journal had forecast a 0.5% drop.
The leading index is a gauge of 10 indicators designed to show whether the economy is getting better or worse. Six of the 10 components dropped in August.
Historically, a big losing streak portends an approaching recession. Yet the economy has continued to expand and many forecasters have dropped their call for a recession. The Federal Reserve is also forecasting solid growth for the next few years.
Key details: A measure of current conditions, known as the coincident index, rose 0.2% in August.
The so-called lagging index — a look in the rearview mirror — also edged up 0.2% last month.
Big picture: Many economists have backed off longstanding predictions of recession or have pushed out a target date until next year. The Conference Board has not.
The resiliency of the economy raises questions about whether the leading indicator is as accurate as it used to be.
Looking ahead: The Conference Board still thinks a recession is more likely than not, though it would probably be “mild.”
“The U.S. Leading Economic Index has now fallen for nearly a year and a half straight, indicating the economy is heading into a challenging growth period and possible recession over the next year,” said Justyna Zabinska-La Monica, senior manager of business cycle indicators at the board.
Market reaction: The Dow Jones Industrial Average
DJIA
and S&P 500
SPX
fell in Thursday trading.
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