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

The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released today (3-17-23) its Leading Economic Index® (LEI) for the US in February. According to the report, the LEI declined 0.3% in February to a reading of 110.0 (2016=100), after declining 0.3% in January. The LEI has dropped 3.6% over the six-month period from August 2022 to February 2023—a much steeper rate of decline than its 3.0% contraction over the previous six-month period (February – August 2022).

The Conference Board Coincident Economic Index® (CEI) increased by 0.1% in February to a reading of 109.8 (2016=100), after an increase of 0.2% in January. The CEI has increased by 0.6% over the six-month period from August 2022 to February 2023—slightly lower than the 0.7% growth recorded 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 a recession in the US.

The Conference Board Lagging Economic Index® (LAG) increased by 0.2% in February to a reading of 118.5 (2016=100), following an increase of 0.1% in January. The LAG has increased by 2.1% over the six-month period from August 2022 to February 2023, less than half the growth rate of 4.6% over the previous six-month period.

Adding additional background and his analysis to the February LEI, Senior Manager, Business Cycle Indicators at the Conference Board Justyna-La Monica said:

“The LEI for the US fell again in February, marking its eleventh consecutive monthly decline. Negative or flat contributions from eight of the index’s ten components more than offset improving stock prices and a better-than-expected reading for residential building permits. While the rate of month-over-month declines in the LEI have moderated in recent months, the leading economic index still points to risk of recession in the US economy. The most recent financial turmoil in the US banking sector is not reflected in the LEI data but could have a negative impact on the outlook if it persists. Overall, The Conference Board forecasts rising interest rates paired with declining consumer spending will most likely push the US economy into recession in the near term.”