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The Conference Board Leading Economic Index® (LEI) for the U.S. Declines Again in October

NEW YORK, Nov. 20, 2023 /PRNewswire/ -- The Conference Board Leading Economic Index® (LEI) for the U.S. fell by 0.8 percent in October 2023 to 103.9 (2016=100), following a decline of 0.7 percent in September. The LEI contracted by 3.3 percent over the six-month period between April and October 2023, a smaller decrease than its 4.5 percent contraction over the previous six months (October 2022 to April 2023).

"The US LEI trajectory remained negative, and its six- and twelve-month growth rates also held in negative territory in October," said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.  "Among the leading indicators, deteriorating consumers' expectations for business conditions, lower ISM® Index of New Orders, falling equities, and tighter credit conditions drove the index's most recent decline. After a pause in September, the LEI resumed signaling recession in the near term. The Conference Board expects elevated inflation, high interest rates, and contracting consumer spending—due to depleting pandemic saving and mandatory student loan repayments—to tip the US economy into a very short recession. We forecast that real GDP will expand by just 0.8 percent in 2024."

The Conference Board Coincident Economic Index® (CEI) for the U.S. was unchanged in October 2023 at 110.8 (2016=100), but the index is below its September's level after a downward revision. The CEI is now up 0.9 percent over the six-month period between April and October 2023, compared to 0.4 percent growth over the previous six months. 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. Three out of four components of the index advanced in October, with personal income less transfer payments being the strongest contributor, followed by manufacturing and trade sales and employees on nonagricultural payroll. Industrial production was the only negative contributor in the month.

The Conference Board Lagging Economic Index® (LAG) for the U.S. improved by 0.1 percent in October 2023 to 118.6 (2016 = 100), following the same rate of increase as in September. The LAG is up slightly by 0.3 percent over the six-month period from April to October 2023, down three-fold from its 0.9 percent growth over the previous six months.

 

Summary Table of Composite Economic Indexes



2023


6-month


Aug


Sep


Oct


Apr to
Oct



















Leading Index

105.4

r

104.7

r

103.9

p



Percent Change

-0.4

r

-0.7


-0.8


-3.3


  Diffusion

40.0


20.0


30.0


45.0











Coincident Index

110.6


110.8

r

110.8

p



  Percent Change

0.1


0.2

r

0.0


0.9


  Diffusion

87.5


100.0


75.0


75.0











Lagging Index

118.4

r

118.5


118.6

p



  Percent Change

0.2

r

0.1

r

0.1


0.3


  Diffusion

42.9


50.0


57.1


14.3











p  Preliminary  r  Revised  c Corrected








Indexes equal 100 in 2016









Source:  The Conference Board








The next release is scheduled for Thursday, December 21, 2023, at 10 A.M. ET.

About The Conference Board Leading Economic Index® (LEI) for the U.S.
The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. 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 is highly correlated with real GDP. The LEI is a predictive variable that anticipates (or "leads") turning points in the business cycle by around 7 months. Shaded areas denote recession periods or economic contractions. The dates above the shaded areas show the chronology of peaks and troughs in the business cycle.

The ten components of The Conference Board Leading Economic Index® for the U.S. include: 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.

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. www.tcb.org

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SOURCE The Conference Board

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