The Conference Board US Leading Economic Index Trends Lower in August

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

• The Leading Economic Index® (LEI) fell 0.2% to a reading of 100.2 (2016=100), following an unrevised decline of 0.6% in July. Over the six-month period between February and August, the LEI fell by 2.3%—a smaller rate of decline than the 2.7% drop over the previous six-month period.
• The Coincident Economic Index® (CEI) increased 0.3% to 112.7 (2016=100), after a downwardly revised 0.1% decline in July. Overall, the CEI grew by 0.8% in the six-month period ending in August, slightly above the 0.6% growth rate over the previous six-month period. 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 components improved in August, with industrial production recovering the most after July’s decline.
• The Lagging Economic Index® (LAG) was unchanged at 119.5 (2016=100), following a 0.1% decline in July. The LAG’s six-month growth rate softened further to 0.3% over the six-month period ending in August, after a 1.1% increase over the previous six-month period.

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

“In August, the US LEI remained on a downward trajectory and posted its sixth consecutive monthly decline. The erosion continued to be driven by new orders, which recorded its lowest value since May 2023. A negative interest rate spread, persistently gloomy consumer expectations of future business conditions, and lower stock prices after the early-August financial market tumult also weighed on the Index. Overall, the LEI continued to signal headwinds to economic growth ahead. The Conference Board expects US real GDP growth to lose momentum in the second half of this year as higher prices, elevated interest rates, and mounting debt erode domestic demand. However, in the Fed’s September Summary of Economic Projections, policymakers suggested 100 basis points of interest rate cuts are likely by the end of this year, which should lower borrowing costs and support stronger economic activity in 2025.”