US economy slows down

A recent gauge of economic activity suggests that the United States may be headed for a recession in the near future. The Conference Board’s Leading Economic Index, which tracks several key indicators of the economy’s trajectory, dropped in December, marking the tenth consecutive month of decline.

The index was pulled down by several factors, including a shorter average workweek for employees, weaker manufacturing orders, and diminished consumer expectations.

The index has dropped 4.2% in the past six months, the fastest decline since the onset of the pandemic. This decline is viewed as an “ominous sign” by economists from Oxford Economics, who predict that a recession will begin between April and June of this year. This prediction aligns with other recent surveys, such as one conducted by the National Association for Business Economics, which also indicates that most economists anticipate a recession in the coming year.

While some investors hold out hope that policymakers can address inflation without causing the economy to stumble, the Federal Reserve’s actions in the next few meetings will play a significant role in determining whether the economy achieves a soft landing or experiences a downturn.

After raising its benchmark rate seven times in the past year, many investors expect the central bank to raise the federal funds rate once more before halting further increases. Some even hope that the Fed will cut interest rates if the economy slows too much.

However, there are also indications that the United States may narrowly avoid a recession, such as figures showing a decline in inflation and a strong labor market with more job openings than workers and rising wages.

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