A monthly index forecasting economic conditions in the United States continues to slide, suggesting the coronavirus pandemic and related restrictions have triggered a recession.
The Conference Board reported its Leading Economic Index (LEI) fell 4.4 percent to 98.8 in April. That decline follows a 7.4 percent decrease in March, the largest monthly decline in the 60-year history of the index.
The Coincident Economic Index (CEI), a separate measure of current conditions, retreated 8.9 percent to 96.6 in April.
“The sharp declines in the LEI and CEI suggest that the U.S economy is now in recession territory,” said Ataman Ozyildirim, senior director of economic research at the Conference Board. “Business conditions may recover for some sectors and industries over the next few months. But the breadth and depth of the decline in the LEI suggest that an imminent reopening of some sectors does not imply a fast rebound for the economy at large.”
The LEI decreased 11.3 percent over the past six months after edging down two-tenths of a percent during the six-month span before that. Weaknesses among the indicators in the index have grown more widespread.
Gross domestic product, the broad measure of goods and services produced in the country, fell at an annual rate of 4.8 percent during the first quarter.
For April, six of 10 indicators of the LEI reclined, including average weekly manufacturing hours, building permits, consumer expectations and leading credit and new orders indexes. An increase in average weekly initial claims for unemployment insurance also pulled down the index. Four indicators advanced: interest rate spread, new orders for both capital and consumer goods and stock prices.
The CEI declined 9.6 percent over the past six months.
For April, industrial production and payrolls decreased even as personal income and sales increased.
The Lagging Economic Indicator (LAG), a measure of past performance, increased 4.1 percent to 115.3. The index rose 6.2 percent over the past three months.
For April, commercial and industrial financing and consumer debt advanced. A decrease in the average duration of unemployment also bolstered the index. The average prime rate charged by banks and the cost of services declined. The cost of labor and inventories held steady.