The Conference Board US Leading Economic Index Continues to Move Lower in February

On Thursday, The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released its US Leading Indicators for February.

• The Leading Economic Index (LEI) declined 0.3% to a reading of 101.1 (2016=100) in February, after a revised decline of 0.2% (originally 0.3%) in January. Overall, the LEI fell 1.0% in the six-month period ending in February, less than half of its 2.1% rate of decline of over the previous six months (February–August 2024).
• The Coincident Economic Index (CEI) increased 0.3% a reading of 114.7 (2016=100) in February, after a 0.2% increase in January. As a result, the CEI rose 1.2% over the six-month period between August 2024 and February, twice its 0.6% growth over the previous six months. The CEI’s four 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. These all improved in February, with the largest positive contribution coming from industrial production, followed by personal income less transfer payments, manufacturing and trade sales, and payroll employment.
• The Lagging Economic Index (LAG) increased 0.4% to a reading of 119.1 (2016=100) in February, after a 0.3% increase in January. As a result, the LAG’s six-month change turned positive, rising 0.2% between August 2024 and February—a reversal of its 0.2% decline from over the previous six months.

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

“The US LEI fell again in February and continues to point to headwinds ahead. Consumers’ expectations of future business conditions turned more pessimistic. That was the component that weighed down most heavily on the Index in February. Manufacturing new orders, which improved in January, retreated and were the second largest negative contributor to the Index’s monthly decline. On a positive note, the LEI’s six-month and annual growth rates, while still negative, have remained on an upward trend since the end of 2023, suggesting that headwinds in the economy as of February may have moderated compared to last year. However, given substantial policy uncertainty and the notable pullback in consumer sentiment and spending since the beginning of the year, we currently forecast that real GDP growth in the US will slow to around 2.0% in 2025.”