US Recession: Leading economic think tank The Conference Board predicts that the United States is entering recession from the current third quarter. The economic downturn will persist until the first quarter of 2024, the think tank says.
Quoting The Conference Board numbers on Thursday, Reuters says an index that tracks economic cycles fell for the 15th straight time in June. A similar decline led to the 2007-2008 recession in the US.
Releasing its latest figures, The Conference Board said its Leading Economic Index declined by 0.6% in June.This decline was 0.6% in May, the report said.
Myriad factors behind recession
Many economists expected the June decline to be 0.6%.
Explaining the June data,Justyna Zabinska-La Monica, a senior manager at The Conference Board said, “Taken together, June’s data suggests economic activity will continue to decelerate in the months ahead.”
The main factors leading to the recession are elevated prices, tighter monetary policy, harder-to-get credit, and reduced government spending, according to Justyna Zaninska-La Monica.
The Conference Board also said that the Lead Economic Index is contracting more rapidly in 2023 than 2022. It fell 4.2% over the last six months compared to 3.8% between June and December 2022, according to the report.
‘Little chance of recession’
Meanwhile, a Goldman Sachs report says that the probability of a US recession in 2024 has fallen to 20%.
The report says, “Our economists say there’s a 20% chance of recession in the next 12 months, down from their projection of 25%.” It goes on to say the20 %chance is ” far below the 54% median among forecasters in the latest Wall Street Journal survey (which is down from 61% three months ago).”
A news report published in Politico in June 2023 says the Fed is hopeful the United States can avoid a recession next year.
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