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The Conference Board no longer expects a recession this year, even though its Leading Economic Index (LEI) fell slightly in January. Instead, the business research group predicts that GDP growth will be relatively flat in the months ahead.

The LEI was down 0.4% in January, extending the decline to an almost record-setting 23 months. However, the decrease over the past six months was significantly smaller than the six months before that, and six out of the 10 indicators that make up the LEI turned positive.

“The U.S. LEI fell further in January, as weekly hours worked in manufacturing continued to decline and the yield spread remained negative,” Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board, said in a press release. “While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024). As a result, the leading index currently does not signal recession ahead. While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”