US Leading Economic Index® Declined Again in December, The Conference Board Reports

The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released today (1-23-23) the Leading Economic Index® (LEI) for the US in December 2022. According to the report, the LEI declined 1.0% in December to a reading of 110.5 (2016=100), following a 1.1% decline in November. The LEI has dropped 4.2% over the six-month period from June to December 2022—a much steeper rate of decline than its 1.9% contraction over the previous six-month period, between December 2021 and June 2022.

The Conference Board Coincident Economic Index® (CEI) increased by 0.1% in December to a reading of 109.6 (2016=100), after no change in November. The CEI has increased by 1.4% over the six-month period from June to December 2022, faster than its growth of 0.4% over the previous six-month period. The Conference Board notes that the CEI component indicators—payroll employment, personal income less transfer payments, manufacturing trade and sales, and industrial production—are included among the data used to determine recession in the US. Only the industrial production index contributed negatively to the CEI in December, the same as in November.

The Conference Board Lagging Economic Index® (LAG) increased by 0.3% in December to a reading of 116.6 (2016=100), following a 0.2% increase in November. The LAG has increased by 2.3% over the six-month period from June to December 2022, much slower that its growth of 4.5% over the previous six-month period.

Adding additional background and his analysis, Senior Director of Economic Research at the Conference Board, Ataman Ozyildirim, said:

“The US LEI fell sharply again in December—continuing to signal recession for the US economy in the near term. There was widespread weakness among leading indicators in December, indicating deteriorating conditions for labor markets, manufacturing, housing construction, and financial markets in the months ahead. Meanwhile, the coincident economic index (CEI) has not weakened in the same fashion as the LEI because labor market related indicators (employment and personal income) remain robust. Nonetheless, industrial production—also a component of the CEI—fell for the third straight month. Overall economic activity is likely to turn negative in the coming quarters before picking up again in the final quarter of 2023.”

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