Using the Composite Indexes: The Leading Economic Index (LEI) provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The Coincident Economic Index (CEI) provides an indication of the current state of the economy. Additional details are below.
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 LEI has continued to fall in 2024, but the rate of decline has moderated since last year |
NOTE: Starting with the September 2023 release, Leading Credit Index™ calculations (from 2020 to current) use the SOFR Overnight Financing Rate in the USD Swap spread semiannual 2 year instead of LIBOR rate. LIBOR remains in the USD Swap spread semiannual 2 year from 1990 to 2020. |
NOTE: The chart illustrates the so-called 3Ds—duration, depth, and diffusion—for interpreting a downward movement in the LEI. Duration refers to how long the decline has lasted. Depth denotes the size of decline. Duration and depth are measured by the rate of change of the index over the most recent six months. Diffusion is a measure of how widespread the decline is among the LEI’s component indicators—on a scale of 0 to 100, a diffusion index reading below 50 indicates most components are weakening.
The 3Ds rule signals an impending recession when: 1) the six-month diffusion index lies below 50, shown by the black warning signal lines in the chart; and 2) the LEI’s six-month rate of decline falls below the threshold of −4.4%. The red recession signal lines indicate months when both criteria are met simultaneously—and thus that a recession is likely imminent or underway.
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:
The four components of the Coincident Economic Index® for the U.S. are:
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
The next release is scheduled for Monday, October 21st at 10 A.M. ET
For further information contact:
Jonathan Liu
732.991.1754
JLiu@tcb.org
Joseph DiBlasi
781.308.7935
JDiBlasi@tcb.org
With graph and summary table
September 19, 2024
PRESS RELEASE
US Leading Economic Index® Inched Down Further in August
September 19, 2024
PRESS RELEASE
US Leading Economic Index® (LEI) Declined in July
August 19, 2024
PRESS RELEASE
US Leading Economic Index® (LEI) Fell Slightly in June
July 18, 2024
PRESS RELEASE
US Leading Economic Index® (LEI) Fell Again in May
June 21, 2024
PRESS RELEASE
US Leading Economic Index® (LEI) Continued to Fall in April
May 17, 2024
PRESS RELEASE
US Leading Economic Index® (LEI) Fell in March
April 18, 2024
All release times displayed are Eastern Time
Charts
The Conference Board Leading Economic Index® (LEI) for the US rose sharply in August and remains on a rapidly rising trajectory. The strengths among the leading indic…
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The Conference Board Leading Economic Index® (LEI) for the United States continued to improve in August, but a recession signal derived from the index has continued t…
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The Conference Board Leading Economic Index®(LEI) for the US dropped 4.4 percent in April, following a decline of 7.4 percent in March.
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