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US LEADING ECONOMIC INDICATORS, May 2024 The Conference Board Leading Economic Index® (LEI) for the U.S. decreased by 0.5 percent in May 2024 to 101.2 --- following a 0.6 percent decline in April. #usleadingeconomicindicatorsmay2024

The February 2024 US Leading Economic Index (LEI) report is available.   Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board said, “The U.S. LEI rose in February 2024 for the first time since February 2022. Strength in weekly hours worked in manufacturing, stock prices, the Leading Credit Index™, and residential construction drove the LEI’s first monthly increase in two years. However, consumers’ expectations and the ISM® Index of New Orders have yet to recover, and the six- and twelve-month growth rates of the LEI remain negative. Despite February’s increase, the Index still suggests some headwinds to growth going forward. The Conference Board expects annualized US GDP growth to slow over the Q2 to Q3 2024 period, as rising consumer debt and elevated interest rates weigh on consumer spending.”   Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession.  

The January 2024 US Leading Economic Index (LEI) report is available. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board, said, “The U.S. LEI fell further in January, as weekly hours worked in manufacturing continued to decline and the yield spread remained negative. While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024). As a result, the leading index currently does not signal recession ahead. While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”   Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession.

The March 2024 US Leading Economic Index (LEI) report is available. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board said, “February’s uptick in the U.S. LEI proved to be ephemeral as the Index posted a decline in March. Negative contributions from the yield spread, new building permits, consumers’ outlook on business conditions, new orders, and initial unemployment insurance claims drove March’s decline. The LEI’s six-month and annual growth rates remain negative, but the pace of contraction has slowed. Overall, the Index points to a fragile—even if not recessionary—outlook for the U.S. economy. Indeed, rising consumer debt, elevated interest rates, and persistent inflation pressures continue to pose risks to economic activity in 2024. The Conference Board forecasts GDP growth to cool after the rapid expansion in the second half of 2023. As consumer spending slows, US GDP growth is expected to moderate over Q2 and Q3 of this year.”   Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession.

The April 2024 US Leading Economic Index (LEI) report is available. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board said, “Another decline in the U.S. LEI confirms that softer economic conditions lay ahead. Deterioration in consumers’ outlook on business conditions, weaker new orders, a negative yield spread, and a drop in new building permits fueled April’s decline. In addition, stock prices contributed negatively for the first time since October of last year. While the LEI’s six-month and annual growth rates no longer signal a forthcoming recession, they still point to serious headwinds to growth ahead. Indeed, elevated inflation, high interest rates, rising household debt, and depleted pandemic savings are all expected to continue weighing on the US economy in 2024. As a result, we project that real GDP growth will slow to under 1 percent over the Q2 to Q3 2024 period.” Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession. https://lnkd.in/d6_VxqcS

The outlook for the US economy this year is brighter than first thought. A new report by the National Association for Business Economics upgraded expectations for 2024. “The NABE Outlook Survey panelists sharply revised upwards their projections for US economic growth in 2024,” Ellen Zentner, NABE president and chief US economist at Morgan Stanley, said in a press release. “The stronger February growth forecasts for 2024 result from upward revisions to key sectors of the economy, including personal consumption expenditures, nonresidential fixed investment, residential investment, and government consumption expenditures and gross investment.” #staffing #manufacturing #logistics #warehouse #productionjobs #economy https://lnkd.in/gP2aBfDP

The Conference Board Leading Economic Index® (LEI) for the U.S. fell by 0.4 percent in January 2024 to 102.7 (2016=100), following a 0.2 percent decline in December 2023. The LEI contracted by 3.0 percent over the six-month period between July 2023 and January 2024, a smaller decrease than the 4.1 percent decline over the previous six months. “The U.S. LEI fell further in January, as weekly hours worked in manufacturing continued to decline and the yield spread remained negative,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024). As a result, the leading index currently does not signal recession ahead. While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.” The Conference Board Coincident Economic Index® (CEI) for the U.S. rose by 0.2 percent in January 2024 to 112.1 (2016=100), after a 0.2 percent increase in December 2023. The CEI expanded by 1.0 percent in the six-month period ending January 2024, down from a 0.8 percent growth rate over the previous six months. The CEI’s component indicators—payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production—are included among the data used to determine recessions in the US. Three out of four components of the index were positive in January, with payroll employment and personal income less transfer payments having the strongest contributions, followed by a much smaller positive contribution from manufacturing and trade sales. The Conference Board Lagging Economic Index® (LAG) for the U.S. rose by 0.4 percent in January 2024 to 118.6 (2016 = 100), reversing a decline of 0.4 percent in December 2023. The LAG is up by 0.9 percent over the six-month period from July to January 2024, following a decline of 0.1 percent over the previous six months.

LEADING ECONOMIC INDICATORS (LEI), August 2024 SUMMARY The Conference Board Leading Economic Index® (LEI) for the U.S. declined by 0.2% in August 2024 to 100.2 (2016=100), following an unrevised 0.6% decline in July. Over the six-month period between February and August 2024, the LEI fell by 2.3%, a smaller rate of decline than the 2.7% drop over the six-month period between August 2023 and February 2024. Justyna Zabinska-la Monica, Senior Manager, Business Cycle Indicators, The Conference Board Comments: "In August, the US LEI remained on a downward trajectory and posted its sixth consecutive monthly decline. "The erosion continued to be driven by new orders, which recorded its lowest value since May 2023. A negative interest rate spread, persistently gloomy consumer expectations of future business conditions, and lower stock prices after the early- financial market tumult also weighed on the Index. Overall, the LEI continued to signal headwinds to economic growth ahead. The Conference Board expects US real GDP growth to lose momentum in the second half of this year as higher prices, elevated interest rates, and mounting debt erode domestic demand. However, in the Fed's September 2024 Summary of Economic Projections, policymakers suggested 100 basis points of interest rate cuts are likely by the end of this year, which should lower borrowing costs and support stronger economic activity in 2025." #leadingeconomicindicatorsaugust2024

Investors are looking at recent economic data for hints about the future of interest rates and the state of the economy. Here are some of the most important indicators to take note of. https://lnkd.in/gnWJzcrh 

The December 2023 US Leading Economic Index (LEI) report is available.   Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board, said, “The US LEI fell slightly in December, continuing to signal underlying weakness in the US economy. Despite the overall decline, six out of ten leading indicators made positive contributions to the LEI in December. Nonetheless, these improvements were more than offset by weak conditions in manufacturing, the high interest-rate environment, and low consumer confidence. As the magnitude of monthly declines has lessened, the LEI’s six-month and twelve-month growth rates have turned upward but remain negative, continuing to signal the risk of recession ahead. Overall, we expect GDP growth to turn negative in Q2 and Q3 of 2024 but begin to recover late in the year.”   Explaining the LEI (this is for academic purposes; it isn’t investment advice): The LEI is a predictor (indicator) of future US economic activity (source: A Guide to Everyday Economic Statistics, Clayton, Giesbrecht, and Guo, 2010). It is one of the most heavily watched indicators of future economic activity. The LEI has historically predicted most recessions with a sharp drop. Predictive indicators are, by their nature, imperfect, and thus, the LEI may fail to anticipate or falsely predict future economic activity. For example, the LEI predicted a recession in 1984, but massive federal deficit spending appears to have provided enough stimulus to avert a recession.