US Economic Warning Signs: Leading Index Points to Recession Risk
Amid widespread economic uncertainty, recent data from the United States Leading Economic Index (LEI) suggests a potential recession looming ahead.
The index, which tracks critical indicators like labor market trends, manufacturing activity, and financial market performance, has plummeted by 14.7% from its recent peak in the current economic cycle. This decline, reported by Global Markets Investor on X platform, echoes historical patterns where similar drops have historically preceded economic downturns dating back over six decades.
RECESSION WARNING:
US Leading Economic Index® (LEI) is down 14.7% from this economic cycle peak.
In the last 65 years, such a drop happened only during recessions.
Index takes into account, US labor market data, manufacturing sector data, building permits, S&P 500 and bonds. pic.twitter.com/YlcgonkwPl
— Global Markets Investor (@GlobalMktObserv) June 24, 2024
Standing at 101.20, the current LEI level reflects a stark departure from previous highs, signaling possible economic contraction ahead. Past instances of such declines have consistently coincided with or heralded recessions, including periods like the early ’80s, ’90s, early 2000s, and the 2008 financial crisis.
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In addition to the LEI, other economic indicators also indicate troubling signs. Reports highlight a surge in permanent job losses in the US, historically linked to economic downturns since 1995.
Furthermore, the Federal Reserve’s model using the US Treasury yield curve suggests a 52% probability of an economic downturn within the coming year, urging caution despite a slight decrease from a peak of 71% in May 2023. These indicators collectively underscore the ongoing fragility and potential risks facing the US economy.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
