The Conference Board Leading Economic Index® Declined Again in January

The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released Friday (2-17-23) its Leading Economic Index® (LEI) for the US in January. According to the report, the LEI declined 0.3% in January to a reading of 110.3 (2016=100), following a 0.8% decline in December. The LEI has dropped 3.6% over the six-month period from July 2022 to January 2023—a much steeper rate of decline than its 2.4% contraction over the previous six-month period.

The Conference Board Coincident Economic Index® (CEI) for the US increased by 0.2% in January to a reading of 109.5 (2016=100) after no change in December. The CEI has increased by 0.7% over the six-month period from July 2022 to January 2023—close to the 0.6% 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. Three of these four CEI components improved in January, with only industrial production being virtually unchanged.

The Conference Board Lagging Economic Index® (LAG) for the US increased by 0.2% in January to a reading of 118.5 (2016=100), following an increase of 0.6% in December. The LAG has increased by 2.8% over the six-month period from July 2022 to January 2023, slower that its growth of 4.1% over the previous six-month period.

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

“The US LEI remained on a downward trajectory, but its rate of decline moderated slightly in January. Among the leading indicators, deteriorating manufacturing new orders, consumers’ expectations of business conditions, and credit conditions more than offset strengths in labor markets and stock prices to drive the index lower in the month. The contribution of the yield spread component of the LEI also turned negative in the last two months, which is often a signal of recession to come. While the LEI continues to signal recession in the near term, indicators related to the labor market—including employment and personal income—remain robust so far. Nonetheless, The Conference Board still expects high inflation, rising interest rates, and contracting consumer spending to tip the US economy into recession in 2023.”