Conference Board US Leading Economic Index® Declines Again in September

The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released on Thursday (10-19-23) its Leading Economic Index® (LEI) for the US in September. The LEI declined 0.7% in September to a reading of 104.6 (2016=100), after posting a 0.5% drop in August. The LEI has dropped 3.4% over the six-month period from March to September, an improvement from its 4.6% contraction over the previous six-month period (September 2022 to March 2023).

The Conference Board Coincident Economic Index® (CEI) increased by 0.3% in September to a reading of 110.9 (2016=100), after a 0.1% increase in August. The CEI has increased by 1.1% over the six-month period from March to September—an acceleration from its 0.4% 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. In September, all four components of the index posted increases, with personal income less transfer payments and employees on nonagricultural payrolls being the strongest contributors, followed by industrial production and manufacturing and trade sales. Over the past six months, the CEI has improved, confirming that current economic activity remains positive.

The Conference Board Lagging Economic Index® (LAG) improved 0.2% in September to a reading of 118.5 (2016=100) but it remains unchanged from August due to revisions to underlying data (which downwardly revised headline readings for June, July, and August). The LAG has increased 0.1% over the six-month period from March to September—substantially below the growth rate of 1.2% over the previous six-month period.

Adding additional background and her analysis to the report, Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board, said:

“The LEI for the US fell again in September, marking a year and a half of consecutive monthly declines since April 2022. In September, negative or flat contributions from nine of the index’s ten components more than offset fewer initial claims for unemployment insurance. Although the six-month growth rate in the LEI is somewhat less negative, and the recession signal did not sound, it still signals risk of economic weakness ahead. So far, the US economy has shown considerable resilience despite pressures from rising interest rates and high inflation. Nonetheless, The Conference Board forecasts that this trend will not be sustained for much longer, and a shallow recession is likely in the first half of 2024.”