Economy: Gloom vs Boom

July 31, 2023

If you’re having difficulty determining whether the economy is poised for growth or recession, you are not alone.  Sentiment is bouncing back and forth, depending on the latest indicator.

The latest Conference Board Leading Economic Index (LEI) falls in the gloom category.  It provides an early indication of significant turning points in the business cycle and where the U.S. economy is heading in the near term.

LEI declined by 0.7 percent in June 2023, following a decline of 0.6 percent in May. The LEI is down 4.2 percent over the six-month period between December 2022 and June 2023.

Lower consumer expectations, an increased number of unemployment claims, and a reduction in housing construction are among the key drivers. The index has been in decline for fifteen months, the longest streak of consecutive decreases since 2007-08, the runup to the Great Recession.

The Conference Board believes the LEI suggests economic activity will continue to decelerate in the months ahead and forecasts a likely recession from Q3 2023 to Q1 2024.

For more: US Leading Indicators