The Conference Board published a report on Thursday indicating a slight decline in leading U.S. economic indicators for June. According to the report, the leading economic index decreased by 0.2 percent in June, following a revised 0.4 percent drop in May.
Economists had forecasted a 0.3 percent dip in the leading economic index for June, compared to the initially reported 0.5 percent decline for the previous month.
"The US LEI continued its downward trend in June, although the rate of contraction was smaller than in the preceding three months," remarked Justyna Zabinska-La Monica, Senior Manager of Business Cycle Indicators at The Conference Board. She noted that the decrease was driven by pessimistic consumer expectations, weak new orders, a negative interest rate spread, and a higher number of initial unemployment claims.
Furthermore, the report highlighted that the leading economic index fell by 1.9 percent in the first half of the year, a smaller decrease compared to the 2.9 percent contraction over the latter half of the previous year. "The reduced month-on-month rate of decline indicates that the LEI's long-term growth is becoming less negative, suggesting a slow recovery," explained Zabinska-La Monica. "Overall, the data from June imply that economic activity is likely to continue losing momentum in the upcoming months."
She added, "We currently project that a slowdown in consumer spending will reduce U.S. GDP growth to around 1 percent (annualized) in Q3 of this year."
Additionally, the report noted that the coincident economic index increased by 0.3 percent in June, following a 0.4 percent rise in May. The lagging economic index edged up by 0.1 percent in June, after a 0.2 percent decrease in the previous month.
