The Conference Board US Leading Economic Index® Declines Further in August

The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released on Thursday (9-21-23) its Leading Economic Index® (LEI) for the US in August. According to the report, the LEI declined 0.4% in August to a reading of 105.4 (2016=100), after posting a 0.3% decline in July. The LEI has dropped 3.8% over the six-month period from February to August—a slight deterioration from its 3.9% contraction over the previous six-month period (August 2022 to February 2023).

The Conference Board Coincident Economic Index® (CEI) increased in August by 0.2% to a reading of 110.6 (2016=100), after a 0.3% increase in July. The CEI has increased by 0.8% over the six-month period from February to August—an acceleration from its 0.5% 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 transfers payments and industrial production being the strongest contributors, followed by manufacturing and trade sales and employees on nonagricultural payrolls. 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) improved 0.2% in August to a reading of 118.5 (2016=100), after improving 0.1% in July. The LAG has increased 0.1% over the six-month period from February to August, substantially below the growth rate of 2.0% over the previous six-month period.

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

“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. 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% in 2023, and then fall to 0.8% in 2024.”