The Index of Leading Economic Indicators is a tool used to predict the direction of the economy. In October, it fell, indicating a potential recession on the horizon, according to The Conference Board. However, despite this drop and the fact that the Index has been decreasing for 19 months without a recession occurring, many economists are still adjusting their forecasts.
Justyna Zabinska-La Monica at The Conference Board explains that one reason we’re not currently in a recession is due to consumer spending remaining stronger than expected. She still predicts a short recession early next year but believes it will be relatively mild because there hasn’t been a dramatic decline in manufacturing or in the housing market.
Meanwhile, U.S. economist Matthew Martin at Oxford Economics no longer predicts a recession for this month. He expects unemployment to increase and labor conditions to soften but believes a soft landing is more likely. He also notes that he is willing to update his forecasts if new economic data emerges.
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