The Index of Leading Economic Indicators is a valuable tool for predicting the direction of the economy. In October, this index fell, indicating that a recession may be on the horizon. However, despite this decline, a recession has not yet occurred. This has led many economists to adjust their forecasts.
Justyna Zabinska-La Monica at The Conference Board explains that one reason we are not currently in a recession is due to the strength of consumer spending. She still predicts a recession early next year, but if it happens, it is expected to be short and relatively mild. This is because there has been no significant decline in manufacturing or in the housing market.
Meanwhile, U.S. economist Matthew Martin at Oxford Economics has changed his prediction for a recession this month. He still believes that unemployment will increase and labor conditions will begin to soften, but he now thinks a soft landing is more likely to occur. He added that he remains open to updating his forecasts if economic data continues to surprise him.
In these uncertain times, it’s important for accurate and accessible news sources like Marketplace to continue reporting on what matters most. To help support this mission, consider making a small monthly donation today