Indicators continue to point to economic growth into spring, albeit more slowly with labor shortages, inflation and risk of new variants as concerns, The Conference Board reported. Its Leading Economic Index for the US fell 0.7% in January from December to a reading of 119.6.

“The US [Leading Economic Index] 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.

Factors contributing to the decline — the first since February 2021 — included initial claims for unemployment insurance, consumers’ outlook and declines in stock prices and the average work week in manufacturing, Ozyildirim said.

“Despite this month’s decline and a deceleration in the [Leading Economic Index’s] six-month growth rate, widespread strengths among the leading indicators still point to continued, albeit slower, economic growth into the spring,” he said. “However, labor shortages, inflation and the potential of new Covid-19 variants pose risks to growth in the near term.”

The Conference Board now forecasts GDP growth for the first quarter to slow from the quick pace of the fourth quarter. However, GDP for the US is still expected to expand by 3.5% this year, well above the pre-pandemic growth rate, which averaged around 2%.