The economy is set to slow, the government's broadest indicator of future growth showed Thursday.

The leading index fell to 30 percent in January, below the threshold of 50 that signals growth will slow in the next three to six months, the Cabinet Office said, matching the median estimate of 26 economists polled. The December number was revised to 50 from 45.5.

Consumer confidence at a four-year low suggests household spending is unlikely to make up for a drop in export demand as the United States heads for its first recession since 2001. Business investment fell at the fastest pace in five years last quarter, the Finance Ministry said Wednesday, signaling the government will have to trim its gross domestic product estimate next week.

"We don't know whether the term recession applies to the current situation, but it's getting close," said Tomoko Fujii, head of Japan economics and strategy at Bank of America Corp. in Tokyo. "At the very least we're looking at a full-fledged slowdown."

Capital spending, used by the government to revise GDP estimates, fell for a third quarter in the three months to Dec. 31, Wednesday's report showed.

The investment drop will cause annualized fourth-quarter growth to be cut to 2.3 percent from the preliminary 3.7 percent, according to the median estimate of 16 economists surveyed.