The economy remains in what could be described as a complicated state as the latest indicators took a slight downturn in August, according to the latest data from nonprofit business research firm The Conference Board.
The Leading Economic Index—an early indicator of where the economy is heading in the near term—decreased slightly in August by 0.1%, resting at a level at 99.5 (with a 100 point baseline equal to the economy of 2016). This is a reversal of the 0.2% increase seen in July.
Justyna Zabinska-La Monica—the senior manager of Business Cycle Indicators at The Conference Board—noted that this was the “first monthly decline since March of this year.”
She also noted that four out of 10 components of the index decreased in August, with “consumer expectations remaining a significant strain on the Index.”
“Building permits also declined on a monthly basis, with decreases in both single- and multi-unit categories and across nearly all regions,” Zabinska-La Monica continued. “The West was the only exception, recording a small increase in total permits.”
Housing economists warned that after the Federal Reserve raised interest rates this week, real estate markets are likely to feel further pressure from rising mortgage rates and other economic headwinds.
On the other hand, the Coincident Economic Index—measuring payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production—increased slightly by 0.1% to 114.9, and is now up by 0.4% over the past six months. All aforementioned components improved.
The Lagging Economic Index also increased slightly in August by 0.2%, clocking in at 120.6. The index is now up 0.9% over the past six months, which the report noted is an acceleration from the previous six month’s growth rate of 0.3%.
Looking at the full picture, Zabinska-La Monica said that with the LEI declining, the index’s “six-month growth rate turned back to slightly negative, suggesting a less certain economic environment ahead.”
“The economy is still expanding, but growth is expected to slow,” she concluded. “The Conference Board forecasts real GDP to increase at a 1.9% rate in 2026, with our outlook for 2027 downwardly revised from 1.9% to 1.8%.”
