- Advertisement -

An oft-overlooked economic indicator showed on Friday that the US economy is heading into recession — or is already in recession — as Federal Reserve tries to curb inflation with a series of rapid hikes in interest rates.

- Advertisement -

The Conference Board’s Index of Leading Economic Indicators showed that conditions worsened further in October, with the index down 0.8% from the previous month. This follows a 0.5% decline in September.

“The US LEI has fallen for the eighth month in a row, suggesting the economy may be in recession,” said Ataman Ozyldirim, senior director of economic research at The Conference Board.

- Advertisement -

The downturn reflects a worsening outlook among consumers, who are increasingly concerned about higher interest rates and persistently high inflation, as well as a prolonged housing market downturn.

DEMOCRATS REJECT ‘DANGEROUS’ Fed HIGH SETPOINTS WARNING MASSIVE JOB LOSSES

Expectations are rising on Wall Street that The Fed will provoke an economic downturn as he raises interest rates at the fastest rate in three decades to catch up with runaway inflation.

Officials this month approved a fourth consecutive 75 basis point rate hike, raising the federal funds rate to a range of 3.75% to 4% – near restrictive levels – and showed no signs of pausing the rate hike.

In a worrying development, the Fed’s rate hike has so far failed to curb inflation, with the government reporting this month that the consumer price index rose 7.7% in October from a year earlier, hovering near a 40-year high.

Fed RAISES INTEREST RATES 75 basis points FOR FOURTH MONTH CONSTANTLY

This indicates that the Fed will have to continue its aggressive course, increasing the likelihood that it will reduce consumer demand and cause unemployment to rise.

“Let me say it,” Fed Chairman Jerome Powell told reporters earlier this month. “It is very premature to think about a suspension. When people hear about delays, they think of pauses. In my opinion, it is very premature to talk about the suspension of rate hikes. We have a path.”

job fair in the USA

Rising interest rates lead to higher rates on consumer and business loans, which slows down the economy forcing employers to cut costs.

Economic growth has already contracted in the first two quarters of the year, with gross domestic product — the broadest measure of goods and services produced in the country — contracting 1.6% in the winter and 0.6% in spring.

However, it rebounded over the summer, with GDP growing 2.6% year-on-year over the three-month period from July to September.