Recession fears have emerged in recent weeks, and the latest release of the Conference Board’s Leading Economic Index (LEI) shows that these fears are not unfounded. The LEI has declined for the third straight month and is starting to look concerningly “toppy” (see top graph below). Furthermore, the LEI’s rate of change is falling very quickly and may soon cross into negative territory which historically has often been indicative of a potential recession. While the LEI hasn’t yet crossed under its 18-month average or turned negative on its rate of change, both signals will confirm recession in short order if the current trend continues.
