This major economic indicator continues to predict recession

Numbers: The US leading economic index fell 1% in December and sent even stronger signals that a recession is likely soon.

Economists polled by the Wall Street Journal had forecast a decline of 0.7%.

The LEI is a gauge of 10 indicators designed to show whether the economy is doing better or worse. The report is published by the nonprofit Conference Board.

The index also fell 1.1% in November.

Big picture: The economy slowed in response to interest rate hikes orchestrated by the Federal Reserve to control inflation. Yet rising borrowing costs also threaten to plunge the United States into a second four-year recession.

Read: A recession is coming, say economists. Some even think it’s already there

Also: A “zero” economy? No growth and rising unemployment forecast for 2023

Key details: The leading index fell in December due to a slowdown in the labor market, a slowdown in manufacturing and a drop in home construction. Wall Street also issued negative signals last month.

A measure of current economic conditions rose just 0.1% in December.

The so-called lagging index – a look in the rearview mirror – increased by 0.3%.

Look forward: “The US LEI fell sharply again in December – continuing to signal a recession for the US economy in the near term,” said Ataman Ozyildirim, senior director of economic research at the board.

Market reaction: The Dow Jones Industrial Average

and S&P 500

increased in Monday transactions.

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