Categories: Economic News

Report: US economy slows, could face recession by year-end | Economy

The US economy is facing growing weakness that could lead to a recession before the end of the year, the Conference Board warned on Thursday.

The futures index of leading business organization indicators fell 0.4% in July, on top of a 0.7% drop in June and has now fallen for five straight months.

“US LEI declined for the fifth consecutive month in July, suggesting recession risks are rising in the near term,” said Ataman Ozyildirim, the council’s senior director of economics.

“Consumer pessimism and stock market volatility, as well as slowing labor markets, homebuilding and new manufacturing orders suggest economic weakness will intensify and spread more broadly across the economy American,” he added. “The Conference Board forecasts that the US economy will not expand in the third quarter and could slip into a short but mild recession by the end of the year or early 2023.”

The index predicts the evolution of the economy in about seven months on average.

Political cartoons about the economy

The reading is in line with other economic data that show the economy is in slow growth mode. Claims for jobless benefits have risen by about 50,000 a week from levels at the start of the year. Retail sales, while nominally growing, are affected by the effects of inflation. The price of oil has fallen due to reduced demand, although this is a net positive in the Federal Reserve’s fight against inflation.

Housing, meanwhile, has measurably slowed down. The National Association of Realtors said Thursday that sales of existing homes fell 5.9 percent in July, following a 5.4 percent drop in June. Sales are now down 20% compared to a year ago. Meanwhile, new home construction is faltering as construction costs rise and mortgage rates have nearly doubled from a year ago.

“The ongoing sales decline reflects the impact of the 6% mortgage rate peak in early June,” said NAR Chief Economist Lawrence Yun. “Home sales may soon stabilize as mortgage rates have fallen to close to 5%, providing an additional boost to homebuyers’ purchasing power.”

The median home price fell $10,000 in July to $403,800.

“Many homebuyers were surprised by mortgage rates jumping 70 basis points in just three weeks, peaking in the second half of June, around when July home closings likely would have been under contract” , Danielle Hale, chief economist at, said before the report.

“Fortunately, mortgage rates have come down since those peaks, but buyers who saw the mortgage rate landscape change so suddenly are likely to look back on the experience and have one more reason to avoid offering the best dollar.”


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