By Maria Martinez


An economic index that measures U.S. business cycles decreased in July for a fifth consecutive month, signaling a decline in economic activity in the near-term.

The Leading Economic Index compiled by the Conference Board fell 0.4% to 116.6 in July from a revised 0.7% decline in June, data from the private-research group showed Thursday.

Economists polled by The Wall Street Journal expected the index to decrease by 0.5% in July.

The index suggests that recession risks are growing in the near term, said Ataman Ozyildirim, senior director of economic research at the Conference Board.

The Conference Board Leading Economic Index is a predictive variable that anticipates turning points in the business cycle by around seven months.

The indicator is based on 10 components, among them initial claims for unemployment insurance, manufacturers' new orders, building permits of new private housing units, stock prices, and consumers expectations. It is intended to signal swings in the business cycle and to smooth out some of the volatility of individual indicators.

"Consumer pessimism and equity market volatility as well as slowing labor markets, housing construction, and manufacturing new orders suggest that economic weakness will intensify and spread more broadly throughout the U.S. economy," Mr. Ozyildirim said.

The Conference Board expects the U.S. economy won't expand in the third quarter and could tip into a short but mild recession by the end of the year or early 2023.

The Coincident Economic Index--a measure of current economic activity--increased 0.3% in July to 108.6, while the Lagging Economic Index rose 0.4% to 114.4, The Conference Board said.


Write to Maria Martinez at


(END) Dow Jones Newswires

August 18, 2022 10:25 ET (14:25 GMT)

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