The Conference Board Leading Economic Index (LEI) for the U.S. declined by 0.4 percent in August 2023 to 105.4 (2016=100), following a decline of 0.3 percent in July. The LEI is down 3.8 percent over the six-month period between February and August 2023 little changed from its 3.9 percent contraction over the previous six months (August 2022 to February 2023). “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,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “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. All these factors suggest that going forward economic activity probably will decelerate and experience a brief but mild contraction. The Conference Board forecasts real GDP will grow by 2.2 percent in 2023, and then fall to 0.8 percent in 2024.” The Conference Board Coincident Economic Index (CEI) for the U.S. improved by 0.2 percent in August 2023 to 110.6 (2016=100), after a 0.3 percent increase in July. The CEI is now up 0.8 percent over the six-month period between February and August 2023 an acceleration from its 0.5 percent growth over the previous six months. The CEI’s component indicators—payroll employment, personal income less transfer payments, manufacturing trade and sales, and industrial production are included among the data used to determine recessions in the US. All four components contributed positively to the index, with personal income less transfer payments and industrial production being the strongest contributors, followed by manufacturing and trade sales and employees on nonagricultural payrolls. Indeed, over the past six months, the CEI has improved signaling that the current environment remains satisfactory for now. The Conference Board Lagging Economic Index (LAG) for the U.S. improved by 0.2 percent in August 2023 to 118.5, after a 0.1 percent increase in July. (2016 = 100). The LAG is up slightly by 0.1 percent over the six-month period from February and August 2023, down dramatically from its 2.0 percent growth over the previous six months.
Conference Board – Leading Economic Index (09-21-23)
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