Conference Board Leading Economic Index (LEI)

The Conference Board’s Leading Economic Indicator (LEI) is published monthly and is one of the most important and widely recognized leading indicators of the U.S. economy. The LEI is a composite index, made up of ten components that include employment, manufacturing, housing, consumer sentiment, stock prices, and credit. Typically, when the LEI has been in a downturn, it’s a sign of impending or current recession.

The latest LEI for February came in at 110.0, down 0.3% from January’s figure and its eleventh consecutive decline. This points to continuing recession risk, and it’s worth noting that the impacts of recent bank turmoil are not captured in this decline. Here’s an excerpt from the latest report:

“Negative or flat contributions from eight of the index’s ten components more than offset improving stock prices and a better-than-expected reading for residential building permits. While the rate of month-over-month declines in the LEI have moderated in recent months, the leading economic index still points to risk of recession in the US economy. The most recent financial turmoil in the US banking sector is not reflected in the LEI data but could have a negative impact on the outlook if it persists. Overall, The Conference Board forecasts rising interest rates paired with declining consumer spending will most likely push the US economy into recession in the near term.”