A report released by the Conference Board on Friday unexpectedly showed a pullback by its reading on leading U.S. economic indicators.
The Conference Board said its leading economic index fell by 0.3 percent in January after climbing by a downwardly revised 0.7 percent in December.
The dip came as a surprise to economists, who had expected the index to rise by 0.3 percent compared to the 0.8 percent increase originally reported for the previous month.
“The U.S. LEI posted a small decline in January, as the Omicron wave, rising prices, and supply chain disruptions took their toll,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.
He added, “Initial claims for unemployment insurance, consumers’ outlook and declines in stock prices, and the average work week in manufacturing all contributed to the decline—the first since February 2021.”
The report also showed the coincident economic index rose by 0.4 percent in January after edging up by 0.2 percent in December.
The lagging economic index also advanced by 0.7 percent in January following a 0.4 percent increase in the previous month.
“Despite this month’s decline and a deceleration in the LEI’s six-month growth rate, widespread strengths among the leading indicators still point to continued, albeit slower, economic growth into the spring,” said Ozyildirim.
He continued, “However, labor shortages, inflation, and the potential of new COVID-19 variants pose risks to growth in the near term.”
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