The Conference Board Leading Economic Index® (LEI) for the U.S. Inched Down Further in August

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Sep 19, 2024, 10:00 ET

NEW YORK, Sept. 19, 2024 /PRNewswire/ -- The Conference Board Leading Economic Index® (LEI) for the U.S. declined by 0.2% in August 2024 to 100.2 (2016=100), following an unrevised 0.6% decline in July. Over the six-month period between February and August 2024, the LEI fell by 2.3%, a smaller rate of decline than the 2.7% drop over the six-month period between August 2023 and February 2024.

"In August, the US LEI remained on a downward trajectory and posted its sixth consecutive monthly decline," said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. "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 2024 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."

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased by 0.3% in August 2024 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 2024, slightly above its 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 Conference Board Lagging Economic Index® (LAG) for the U.S. was unchanged at 119.5 (2016=100) in August 2024, after a decline of 0.1% in July. The LAG's six-month growth rate softened further to 0.3% over the six-month period ending in August 2024, after a 1.1% increase over the six-month period from February 2023 to August 2024.

The next release is scheduled for Monday, October 21, 2024, at 10 A.M. ET.

Summary Table of Composite Economic Indexes


			2024				6-Month
	June		July		August		Feb to Aug
Leading Index	101.0		100.4		100.2	p
Percent Change	-0.2		-0.6		-0.2		-2.3
Diffusion	45.0		30.0		60.0		40.0
Coincident Index	112.5		112.4	r	112.7	p
Percent Change	0.2		-0.1	r	0.3		0.8
Diffusion	100.0		75.0		100.0		100.0
Lagging Index	119.6	r	119.5	r	119.5	p
Percent Change	0.1	r	-0.1		0.0		0.3
Diffusion	35.7		50.0		28.6		21.4
p Preliminary r Revised c Corrected				Source: The Conference Board
Indexes equal 100 in 2016				Source: The Conference Board

About The Conference Board Leading Economic Index® (LEI) and Coincident Economic Index® (CEI) for the U.S.
The composite economic indexes are key elements in an analytic system designed to signal peaks and troughs in the business cycle. Comprised of multiple independent indicators, the indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component.

The CEI reflects current economic conditions and is highly correlated with real GDP. The LEI is a predictive tool that anticipates—or "leads"—turning points in the business cycle by around seven months.

The ten components of the Leading Economic Index® for the U.S. are:

Average weekly hours in manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers' new orders for consumer goods and materials
ISM^® Index of New Orders
Manufacturers' new orders for nondefense capital goods excluding aircraft orders
Building permits for new private housing units
S&P 500^® Index of Stock Prices
Leading Credit Index^™
Interest rate spread (10-year Treasury bonds less federal funds rate)
Average consumer expectations for business conditions

The four components of the Coincident Economic Index® for the U.S. are:

Payroll employment
Personal income less transfer payments
Manufacturing and trade sales
Industrial production

To access data, please visit: https://data-central.conference-board.org/

About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What's Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org

SOURCE The Conference Board