Concerns about a U.S. economic recession are gradually easing, which is favorable for the cryptocurrency risk market

ChainCatcher message, data released on Tuesday by a U.S. nonprofit and nonpartisan research organization indicates that the economic indicators in the U.S. still point to an economic slowdown, but no longer suggest a recession. This is a positive signal for risk assets, including cryptocurrencies.

The organization's Leading Economic Index (LEI) fell by 0.6% in July to 100.4, following a 0.2% decline in June. The index peaked in the second quarter of 2022 and has been declining since then. The LEI includes several forward-looking indicators, such as average weekly hours in manufacturing, the average number of initial unemployment insurance claims, the ISM new orders index, stock prices, and the leading credit index.

It helps identify changes in economic trends and turning points in financial markets and is considered one of the most reliable signals for predicting recessions—defined as two consecutive quarters of negative economic growth. The continued decline of the LEI suggests that the economy is facing impending headwinds.

However, the annualized six-month change rate for July narrowed to -2.1%, compared to -3.1% in June, indicating that the risk of recession is diminishing.