The Conference Board US Leading Economic Index® Declines Again in December

The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released on Monday (1-22-24) its US Leading Indicators for December 2023.

• The Leading Economic Index® (LEI) declined 0.1% in December to a reading of 103.1 (2016=100), following a decline of 0.5% in November. The LEI has contracted 2.9% over the six-month period from June 2023 to December 2023, a smaller decrease than the 4.3% contraction over the previous six-month period (December 2022 to June 2023).
• The Coincident Economic Index® (CEI) rose 0.2% in December to a reading of 111.7 (2016=100), following a 0.2% increase in November. The CEI is now up 1.1% over the six-period between June 2023 and December 2023, up from 0.8% growth over the previous six-month period (December 2022 to June 2023). 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 December, all four components advanced, with personal income less transfer payments being the strongest contributor, followed by much smaller positive contributions from the remaining three components.
• The Lagging Economic Index® (LAG) declined 0.2% in December to a reading of 118.4 (2016=100), partially reversing the 0.5% improvement in November. The LAG has increased 0.6% over the six-month period from June 2023 to December 2023, following no change over the previous six-month period (December 2022 to June 2023).

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

“The US LEI fell slightly in December, continuing to signal underlying weakness in the US economy. Despite the overall decline, six out of ten leading indicators made positive contributions to the LEI in December. Nonetheless, these improvements were more than offset by weak conditions in manufacturing, the high-interest rate environment, and low consumer confidence. As the magnitude of monthly declines has lessened, the LEI’s six-month and twelve-month growth rates have turned upward but remain negative, continuing to signal the risk of recession ahead. Overall, we expect GDP growth to turn negative in Q2 and Q3 of 2024 but begin to recover late in the year.”