The Conference Board US Leading Economic Index® Declines Unexpectedly in March

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

• The Leading Economic Index® (LEI) decreased 0.3% in March to a reading of 102.4 (2016=100), following a 0.2% increase in February. The LEI contracted 2.2% over the six-month period from September 2023 to March 2024—a smaller decline than the 3.4% contraction over the previous six-months period.
• The Coincident Economic Index® (CEI) rose 0.3% in March to a reading of 112.0 (2016=100), following a 0.1% increase in February. The CEI is now up 0.6% over the six-month period ending in March, down from a 0.9% increase 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. All four components advanced in March, with personal income less transfer payments providing the strongest contribution to the Index.
• The Lagging Economic Index® (LAG) was unchanged in March, holding steady at 119.0 (2016=100) following a 0.3% increase in February. The LAG increased 1.0% over the six-month period ending in March after recording no growth over the previous 6 months.

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

“February’s uptick in the US LEI proved to be ephemeral as the Index posted a decline in March. Negative contributions from the yield spread, new building permits, consumers’ outlook on business conditions, new orders, and initial unemployment insurance claims drove March’s decline. The LEI’s six-month and annual growth rates remain negative, but the pace of contraction has slowed. Overall, the Index points to a fragile—even if not recessionary—outlook for the US economy. Indeed, rising consumer debt, elevated interest rates, and persistent inflation pressures continue to pose risks to economic activity in 2024. The Conference Board forecasts GDP growth to cool after the rapid expansion in the second half of 2023. As consumer spending slows, US GDP growth is expected to moderate over Q2 and Q3 of this year.”