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

The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released on Monday (11-20-23) its US Leading Indicators for October.

The Conference Board Leading Economic Index® (LEI) declined 0.8% in October to a reading of 103.9 (2016=100), after posting a 0.7% decline in September and a 0.5% drop in August. The LEI has contracted 3.3% over the six-month period from April to October, a smaller decrease than the 4.5% contraction over the previous six-month period (October 2022 to April 2023).

The Conference Board Coincident Economic Index® (CEI) was unchanged in October at a reading of 110.8 (2016=100), but the index is below its September level after a downward revision. The CEI is now up 0.9% over the six-month period between April and October, compared to 0.4% growth over the previous six-month period. 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 October, three out of the index’s four components advanced, with personal income less transfer payments being the strongest contributor, followed by manufacturing and trade sales and employees on nonagricultural payroll. Industrial production was the only negative contributor.

The Conference Board Lagging Economic Index® (LAG) improved 0.1% in October to a reading of 118.6 (2016=100), following the same rate of increase as in September. The LAG has increased 0.3% over the six-month period from April to October, substantially below the growth rate of 0.9% 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 US LEI trajectory remained negative, and its six- and twelve-month growth rates also held in negative territory in October. Among the leading indicators, deteriorating consumers’ expectations for business conditions, lower ISM® Index of New Orders, falling equities, and tighter credit conditions drove the index’s most recent decline. After a pause in September, the LEI resumed signaling recession in the near term. The Conference Board expects elevated inflation, high interest rates, and contracting consumer spending—due to depleting pandemic saving and mandatory student loan repayments—to tip the US economy into a very short recession. We forecast that real GDP will expand by just 0.8% in 2024.”