Conference Board Leading Economic Index® sees August Decline

The USA’s Conference Board Leading Economic Index (LEI) fell by 0.3% in August to 116.2, after a previous decline of 0.5% in July. The LEI dropped by 2.7% in the six-months between February and August of this year, a stark contrast from its 1.7% growth over the previous six-month period.

“The US LEI decline for a sixth consecutive month potentially signalling a recession,” commented Senior Director of Economics at The Conference Board, Ataman Ozyildrim. He added that “Among the index’s components, only initial unemployment claims and the yield spread contributed positively over the last 6 months, and the contribution of the yield spread has narrowed recently.” 

Ozyildirim continued his analysis of the index, stating “Furthermore, labour market strength is expected to continue moderating in the months ahead. Indeed, the average workweek in manufacturing contracted in four of the last six months – a notable sign, as firms reduce hours before reducing their workforce. Economic activity will continue slowing more broadly throughout the US economy and is likely to contract. A major driver of this slowdown has been the Federal Reserve’s rapid tightening of monetary policy to counter inflationary pressures. The Conference Board projects a recession in the coming quarters.”

Meanwhile, The Conference Board Coincident Economic Index (CEI) for the USA rose by 0.1% in august to 108.7, following a 0.5% increase in July. The CEI had increased by 0.6% over the six months from February to August of this year, which is slower than the 1.5% it attained over the previous six-month period.

The Conference Board Lagging Economic Index (LAG) for the USA has risen by 0.7% in August 2022 to 115.4, on the back of a 0.4% rise in July. Overall, the LAG has increased by 4.4% over the last six months from February to August, outpacing it’s previous growth of 2.5% over the last six-month period.

Further updates from The Conference Board are expected on October 20th, 2022.