Leading Economic Indicators Signal a Recession

The Conference Board Leading Economic Index (LEI) for the U.S. decreased by 0.3% in August 2022 to 116.2 (2016=100), after declining by 0.5% in July. The LEI fell 2.7% over the six-month period between February and August 2022, a reversal from its 1.7% growth over the previous six months.

"The US LEI declined for a sixth consecutive month potentially signaling a recession," Ataman Ozyildirim, Senior Director, Economics, at The Conference Board. "Among the index's components, only initial unemployment claims and the yield spread contributed positively over the last six months—and the contribution of the yield spread has narrowed recently."

"Furthermore, labor market strength is expected to continue moderating in the months ahead. Indeed, the average workweek in manufacturing contracted in four of the last six months—a notable sign, as firms reduce hours before reducing their workforce. Economic activity will continue slowing more broadly throughout the US economy and is likely to contract. A major driver of this slowdown has been the Federal Reserve's rapid tightening of monetary policy to counter inflationary pressures. The Conference Board projects a recession in the coming quarters."

The Conference Board Coincident Economic Index (CEI) for the U.S. increased by 0.1% in August 2022 to 108.7 (2016=100), after increasing by 0.5% in July. The CEI rose by 0.6% over the six-month period from February to August 2022, slower than its growth of 1.5% over the previous six-month period.

The Conference Board Lagging Economic Index (LAG) for the U.S. increased by 0.7% in August 2022 to 115.4