The Conference Board US Leading Economic Index Continues to Slow in June

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

• The Leading Economic Index® (LEI) decreased 0.2% in June to a reading of 101.1 (2016=100), following a 0.4% decline (upwardly revised) in May. Over the first half of 2024, the LEI fell 1.9%—a smaller decrease than its 2.9% contraction over the second half of 2023.
• The Coincident Economic Index® (CEI) rose 0.3% in June to 112.6 (2016=100), after increasing 0.4% in May. The CEI grew 0.6% over the first half of 2024, about half its growth rate of 1.3% 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. All four components of the index improved in June, with industrial production making the largest positive contribution to the CEI for the second consecutive month.
• The Lagging Economic Index® (LAG) inched up 0.1% in June to 119.5 (2016=100), partially reversing a decline of 0.2% in May. The LAG’s six-month growth rate rebounded to 1.2% over the first half of this year, substantially higher than its 0.3% increase over the second half of 2023.

In remarks and analysis accompanying the report, Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators at The Conference Board, said:

“The US LEI continued to trend down in June, but the contraction was smaller than in the past three months. The decline continued to be fueled by gloomy consumer expectations, weak new orders, negative interest rate spread, and an increased number of initial claims for unemployment. However, due to the smaller month-on-month rate of decline, the LEI’s long-term growth has become less negative, pointing to a slow recovery. Taken together, June’s data suggest that economic activity is likely to continue to lose momentum in the months ahead. We currently forecast that cooling consumer spending will push US GDP growth down to around 1% (annualized) in Q3 of this year.”