The Conference Board Leading Economic Index for the US declined in August, falling 0.4% to a reading of 105.4 (2016=100). August’s decrease follows a decline of 0.3% in July.

“With August’s decline, the US Leading Economic Index has now fallen for nearly a year and a half straight, indicating the economy is heading into a challenging growth period and possible recession over the next year,” Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board, said in a press statement. “The leading index continued to be negatively impacted in August by weak new orders, deteriorating consumer expectations of business conditions, high interest rates and tight credit conditions.”

The LEI is now down 3.8% over the six months between February and August 2023 — little changed from its 3.9% contraction over the previous six-month period between August 2022 and February 2023.

“All these factors suggest that going forward, economic activity probably will decelerate and experience a brief but mild contraction,” Zabinska-La Monica said.

Meanwhile, The Conference Board forecast real GDP will grow by 2.2% this year and fall to 0.8% in 2024.