WASHINGTON (Reuters) – A gauge of future U.S. economic activity fell for the sixth straight month in August, likely pointing to a recession amid massive interest rate increases from the Federal Reserve.
The Conference Board said Thursday that its leading economic index fell 0.3% last month after falling 0.5% in July. Economists polled by Reuters had expected the index to fall 0.1 percent. The index fell 2.7% between February and August, a reversal of the 1.7% increase over the previous six months.
“Economic activity will continue to slow more broadly across the US economy and is likely to contract,” said Ataman Ozildirim, senior director of economics at the Conference Board in Washington. “The main driver of this slowdown was the Fed’s rapid tightening of monetary policy to counter inflationary pressures. The Conference Board expects a recession in the coming quarters.”
The US central bank raised the interest rate by 75 basis points on Wednesday, the third consecutive increase of this size. He pointed to more big increases to come this year.