Conference Board Withdraws U.S. Recession Forecast

The Conference Board, a U.S. economic research organization, withdrew its forecast on the 20th (local time) that the U.S. would enter a recession for the first time in 1 year and 8 months. Although the leading economic index still shows weakness, the reason is that detailed indicators are improving.

According to the Conference Board on the 20th (local time), the U.S. Leading Economic Index in January this year recorded 102.7, down 0.4% from the previous month. This was worse than the market expectation compiled by The Wall Street Journal (WSJ) (0.3%↓, previous month 0.2%↓). This is the lowest level since April 2020, when there was a recession due to the shutdown caused by the COVID-19 pandemic. The Leading Economic Index has been declining for 23 consecutive months.

However, the Conference Board noted that the annualized decline rate of the Leading Economic Index over the past six months (-3.0%) has sharply slowed. This is an improvement from the previous decline rate (-4.1%). The Conference Board stated that based on these results, the Leading Economic Index no longer signals a U.S. recession.

The Conference Board's Leading Economic Index is estimated based on 10 components, including job creation and consumer spending. Justyna Zawinska-La Monica, the senior manager in charge of the Conference Board's business cycle indicators, said, "For the first time in two years, six out of the 10 components of the Leading Economic Index have been positive over the past six months," adding, "therefore, the current Leading Economic Index does not predict a recession." The Conference Board had announced in July 2022 that the Leading Economic Index was signaling an approaching recession for the first time.

However, the Conference Board acknowledged that signs of economic slowdown are detected. Manager La Monica predicted that the real Gross Domestic Product (GDP) growth rate for the second and third quarters of this year is expected to remain at zero (0) level.

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