The Conference Board US Leading Economic Index® Moves Lower in January

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

• The Leading Economic Index® (LEI) declined 0.4% in January to a reading of 102.7 (2016=100), following a 0.2% decline in December. The LEI has contracted 3.0% over the six-month period from July 2023 to January 2024, a smaller decrease than the 4.1% contraction over the previous six-month period (December 2022 to June 2023).
• The Coincident Economic Index® (CEI) rose 0.2% in January to a reading of 112.1 (2016=100), following a 0.2% increase in December. The CEI is now up 1.0% over the six-month period between July 2023 and January 2024, down 0.8% 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 January, three out of the four components advanced, with payroll employment and personal income less transfer payment having the strongest contributions, followed by a much smaller positive contribution from manufacturing and trade sales.
• The Lagging Economic Index® (LAG) increased 0.4% in January to a reading of 118.6 (2016=100), reversing a 0.4% decline in December. The LAG has increased 0.9% over the six-month period from July 2023 to January 2024, following a 0.1% decline over the previous six-month period.

In remarks and analysis prepared to accompnay the results of the Leading Indicators for January, Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board, said:

”The US LEI fell further in January, as weekly hours worked in manufacturing continued to decline and the yield spread remained negative. While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of the its ten components were positive contributors over the past six-month period (ending in January 2024). As a result, the leading index currently does not signal recession ahead. While no long forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”