The Conference Board Leading Economic Index (LEI) for the U.S., which provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term, declined by 0.4% in October, to 99.5, following a 0.3% decline in September.
Over the six-month period between April and October 2024, the LEI fell by 2.2%, slightly more than its 2% decline over the previous six-month period (October 2023 to April 2024).
“The largest negative contributor to the LEI’s decline came from manufacturer new orders, which remained weak in 11 out of 14 industries,” said Justyna Zabinska-La Monica, senior manager, Business Cycle Indicators, at The Conference Board, in a statement. “In October, manufacturing hours worked fell by the most since December 2023, while unemployment insurance claims rose and building permits declined, partly reflecting the impact of hurricanes in the Southeast U.S. Additionally, the negative yield spread continued to weigh on the LEI. Apart from possible temporary impacts of hurricanes, the U.S. LEI continued to suggest challenges to economic activity ahead.”
The Conference Board Coincident Economic Index (CEI), which measures more current conditions, was unchanged for a second month in a row at 112.8. The CEI increased by 0.8% in the six-month period ending October 2024, higher than its 0.5% growth rate over the previous six-month period.
The CEI’s component indicators—payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production—are included among the data used to determine recessions in the U.S. Personal income less transfer payments and manufacturing and trade sales, which are estimates for October, contributed positively but were offset by the second consecutive decline in industrial production. Payroll employment was virtually unchanged.
The 10 components of the Leading Economic Index for the U.S. are:
- Average weekly hours in manufacturing
- Average weekly initial claims for unemployment insurance
- Manufacturers’ new orders for consumer goods and materials
- ISM Index of New Orders
- Manufacturers’ new orders for nondefense capital goods excluding aircraft orders
- Building permits for new private housing units
- S&P 500 Index of Stock Prices
- Leading Credit Index
- Interest rate spread (10-year Treasury bonds less federal funds rate)
- Average consumer expectations for business conditions
