The conference board’s Leading Economic Index (LEI), the most reliable and significant indicator of recessions, has been trending down for the past two months. The LEI (a combination of ten leading indicators) usually drops far ahead of the forthcoming recession and has started dwindling, indicating a probable downturn shortly.
Higher inflation, rising interest rates, supply constraints, tight labor market, and wage inflation are the major factors in the slowing growth. However, full employment, possible tariff reduction, strong housing demand, and falling commodity prices abate the rapid fall of the economy. After a prolonged expansion since 2009, our economy will take a breath for a short-term period.