The Index of Leading Economic Indicators is meant to give insight into where the economy’s headed — that’s what the “leading” part means. According to The Conference Board, this index fell in October, and they suggest that it’s a sign of a coming recession.
Despite the fact that the index has been falling for 19 months, no recession has occurred so far. It turns out that a lot of economists have been updating their forecasts lately. The Conference Board was previously predicting a recession earlier this year, but that timeframe has been shifting, said Justyna Zabinska-La Monica at The Conference Board. She said that consumer spending stayed stronger than expected, preventing a recession. However, she noted that this could change, particularly since student loan payments have resumed. She is still forecasting a recession early next year, but if it happens, it’ll probably be short due to various factors like the stability of manufacturing, housing, declining inflation, and a relatively tight labor market.
U.S. economist Matthew Martin at Oxford Economics said he is no longer forecasting a recession as of this month. He stated, “While we still see unemployment increasing and labor conditions begin to soften, we think the most likely chance is a soft landing now.” However, he added if the economic data keeps surprising him, he’ll have no problem updating his forecasts again.