The economy is slowing overall, continuing a less than ideal market to become a homebuyer, per the latest findings from the nonprofit Conference Board on Leading Economic Indicators (LEI).
In July, the LEI experienced a mere 0.1% drop from June, compared to June’s 0.3% drop that was attributed to economic challenges such as tariffs. Over the past six months, the LEI has dropped by 2.7%, continuing the faster rate of decline compared to the 1% drop seen in the second half of 2024.
“While the LEI’s six-month growth rate remains negative, it improved slightly in July—but not enough to avoid triggering the recession signal again,” said the Conference Board’s Senior Manager of Business Cycle Indicators Justyna Zabinska-La Monica while summarizing the findings in the report’s press release.
Of the economic factors included in this index, stock prices and low unemployment insurance claims were cited as the most positive signs in July. Unemployment claims in particular were cited as an encouraging sign, as they contributed negatively to the index over the past three months.
Low consumer confidence and low new manufacturer orders were highlighted as drags on the index in July—low consumer confidence has recently been cited by real estate professionals as a challenge to seeing deals through.
The LEI’s diffusion, measuring how widespread economic growth or slowing is across all economic components, posted an improvement in July. On a scale of 1 – 100, the July LEI diffusion was 65, up from the 45 in June. (For reference, diffusion under 50 is the sign that most economic components are weakening.)
Zabinska-La Monica noted that The Conference Board does not project a recession will occur in the second half of 2025. The economy is projected to slow down during the back half of the year, though, “as the negative impacts from tariffs become more visible,” Zabinska-La Monica said.
The report’s Coincident Economic Index (CEI), which measures the current state of the economy, rose month-over-month by 0.2% in July. Six-month growth from January was 0.9%, compared to 0.6% the previous six months. Of the four major components used to measure the CEI (payroll employment, personal income minus transfer payments, manufacturing and trade sales, and industrial production), three of the four improved in July—industrial production was the odd man out.
The Lagging Economic Index (LEI), which measures past economic trends, was unchanged month to month in July. Six-month growth improved to 0.9%, after declining 0.1% in the previous six months.
GDP growth is forecast for 1.6% during the rest of 2025, but it is also projected to slow to 1.3% in 2026, according to The Conference Board.
For the full LEI press release, click here.
