NEW YORK — The slowdown in the U.S. economy, coupled with a steady drip of bleak economic data, is starting to echo the conditions that presaged the country’s most recent recession.
Data released Thursday by the Conference Board business group showed its gauge of future business activity dropped in January for the fourth month in a row. Its index of leading economic indicators has fallen 2.0 percent during the last six months, the biggest drop since early 2001.
The index is designed to forecast where the nation’s economy is headed in the next three to six months — and persistent, pronounced declines signal that a recession may be around the corner.
“The conditions are nearing those that historically preceded recessions,” said Ataman Ozyildirim, an economist at the Conference Board. “Every recession is a bit different, but we’re becoming more confident that we’re nearing those conditions.”
The figures, in conjunction with downbeat news about manufacturing and a murky employment picture, sent the Dow Jones industrial average down more than 140 points Thursday as investors feared the onset of a recession. Broader indexes also closed lower.
Markets had been hoping for economic data to show the economy wasn’t shrinking, but to signal enough weakness to spur the Federal Reserve to again slash interest rates in March.
More dour news came from the Philadelphia Federal Reserve, which reported a much lower-than-expected manufacturing index for February.
The Fed nevertheless maintains the country could avoid a recession, which is generally defined as two consecutive quarters of economic contraction.
Some private analysts, however, say the economy has already entered a downturn and expect it to last through the spring.
Officials from the Conference Board say their data shows there isn’t one — yet.
The leading index has been approaching a trend that historically precedes recessions, Ozyildirim said. In the months leading up to the 2001 recession, the six-month drop in the leading index was 2.2 percent. Since 1959, the six-month drop before a recession has been closer to 2.5 percent, he said.
But the group’s coincident index, which measures where the economy is right now, edged up 0.1 percent in January. That slow but steady growth suggests the economy is not currently in a recession, said Ken Goldstein, the Conference Board’s labor economist.
Despite the gain, the six-month growth rate in the coincident index slowed to 0.4 percent, down from a 1.1 percent rate from January 2007 to July 2007.
