How Likely Is A Recession? Leading Economic Indicators Fall For Second Straight Month

U.S. leading economic indicators fell for the second month in a row in September, the Conference Board reported Friday.

The report was the latest pointing to a slowdown in the U.S. economy, pressured by the trade dispute with China and slowing growth worldwide. The figures show the U.S. economy is still growing, “albeit more slowly,” said Ataman Ozyildirim, senior director of economic research at the Conference Board.

The Conference Board said indicators were off 0.1% for the month, following a 0.2% decline in August.

“The U.S. [leading indicators] declined in September because of weaknesses in the manufacturing sector and the interest rate spread which were only partially offset by rising stock prices and a positive contribution from the leading credit index,” Ozyildirim said.

“The [leading indicators index] reflects uncertainty in the outlook and falling business expectations, brought on by the downturn in the industrial sector and trade disputes. Looking ahead, the [leading economic indicators index] is consistent with an economy that is still growing, albeit more slowly, through the end of the year and into 2020.”

The Conference Board put the coincident economic index at 106.4, unchanged from August and the lagging economic index at 108.3, up 0.1 from August. Both indexes were set at 100 in 2016.

The report virtually confirms the U.S.-China trade war is damaging both countries’ economies. China earlier reported its slowest growth in nearly 30 years in the third quarter, just 6% and a tick below economic forecasts. Diane Swonk, chief economist for Grant Thornton, noted even the 6% figure might be exaggerated, citing a study that indicated Beijing overstated growth by 2% a year from 2008 to 2016.

AIER’s Leading Indicators index also fell in September but still held on the positive side of neutral, Seeking Alpha reported. The business cycle conditions leading indicators index for September fell 4 points to 54 while the roughly coincident indicators index held at 83 and the lagging indicators index was steady at 67.

Household net worth hit a record for the second straight quarter.