Economists and investors are increasingly paying attention to recent movements in the U.S. Leading Economic Index (LEI) as signs emerge that economic momentum may be slowing. The LEI, published monthly by the Conference Board, is designed to forecast future economic activity by tracking forward looking indicators such as manufacturing orders, stock market performance, building permits, and unemployment claims. While the U.S. economy has continued to grow, recent declines in the LEI suggest that this growth may be losing steam as the country moves further into 2026.
The Conference Board reported that the LEI declined again in its most recent release, continuing a broader downward trend seen over the past several months. Historically, long drops in the index have often preceded periods of slower economic growth, as businesses and consumers begin to pull back on investment and spending. Although a recession is not guaranteed, the weakening LEI suggests the U.S. economy may be transitioning from rapid expansion to a more moderate pace of growth, highlighting the importance of monitoring leading indicators rather than relying solely on data from the past such as GDP.
https://www.conference-board.org/topics/us-leading-indicators
This is a great insight that I believe most of us would never pay attention to if not shown. The biggest question this makes me wonder is what kind of things we will see out of the new Fed Chair to fight this.
ReplyDeleteThis is a great post; I learned a lot from this post that I did not know before. This article shows why relying on GDP can be misleading and lead people to think the wrong thing.
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