A monthly index forecasting economic  conditions in the United States continues to decline, signaling slowing and what could be a recession.

The Conference Board reported its Leading Economic Index decreased four-tenths of a percent to 105.8 in July. A separate measure of current conditions increased. A measure of past conditions remained unchanged.

The Leading Economic Index fell 4 percent over the past six months and has declined for 16 months. That’s the longest streak since 2007 and 2008, a period leading up to the Great Recession.

Justyna Zabinska-La Monica, senior manager of business cycle indicators for the Conference Board, said the index suggests economic activity is likely to slow and descend into a mild contraction in the months ahead. The Conference Board forecasts a short and shallow recession in the fourth quarter of 2023 to first quarter of 2024.

However, the Coincident Economic Index indicates current conditions remain favorable, she said.

Gross domestic product, the broad measure of goods and services produced in the U.S., grew at an annual rate of 2.4 percent in the second quarter.

For July, five of 10 indicators of the Leading Economic Index retreated, including consumer expectations for business conditions, interest rate spread, leading credit and new orders indexes and weekly manufacturing hours. New orders for capital goods and stock prices increased. A decreased in claims for unemployment benefits also bolstered the index. Building permits and new orders for consumer goods held steady.

The Coincident Economic Index rose four-tenths of a percent to 110.5. The index increased seven-tenths of a percent over the past six months.

For July, all four indicators of the index advanced — industrial production, nonfarm payrolls, personal income and sales. 

The Lagging Economic Index remained unchanged at 118.3. The index slipped a tenth of a percent over the past three months.

For June, four of seven indicators of the index rose, including the average prime rate charged by banks, consumer credit and inventories. A decrease in the duration of unemployment also bolstered the index. The cost of labor and services retreated as did commercial and industrial financing.