At the end of 2025, the leading indicators of the economy suggested a slowing contraction, but enduring consumer cynicism. The latest Leading Economic Indicators (LEI) report from nonprofit business research organization The Conference Board found a 0.2% decline in December, compared to a 0.3% decline in November.
The report’s baseline (measured against 2016, rated at 100) was 97.6, coming off a 2.8% decline in the first half of 2025 and then a slowed decline of 1.2% in the year’s second half. The slowing of the decline reflects in the LEI’s six-month growth rate, which has not crossed the threshold to signal a likely recession since August 2025.
Nonetheless, there is a projected slowdown in economic growth to kickoff 2026. Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board, stated that: “Overall, the LEI signals weaker economic activity at the start of this year.”
While the financial components of the economy (for instance, the S&P 500 index) showed positive growth, non-financial components generally declined.
Zabinska-La Monica pointed to “consistently weak consumer expectations indicators” (which, in the second half of 2025, declined by 1.2%) as well as the index tracking orders for new consumer goods as the biggest drags on the LEI. The labor market also showed signs of concern due to an increase in unemployment claims and a decline in manufacturing hours worked.
Consumer sentiment has an important but complicated relationship with housing markets, while job growth is much more closely related to home sales and prices, with housing economists emphasizing that a healthy labor market is vital to support real estate.
The non-financial measure that showed the greatest growth? Building permits for private housing. This corresponds with recent data from the Census Bureau showing that housing starts and building permits saw a marked month-over-month jump at the end of 2025. However, the number of building permits issued in 2025—1.43 million—was down 3.6% from 1.48 million in 2024.
The Conference Board’s Coincident Economic Index (CEI)—measuring the current state of the economy through measuring payroll employment, personal income less transfer payments, manufacturing and trade sales and industrial production—improved slightly in December 2025 with a 0.2% increase; all four of the index’s components also showed improvement. The CEI improved by 0.3% in the second half of 2025, compared to 0.4% in the first half.
The Lagging Economic Index, assessing long-term economic trends, posted a 0.1% decline in December, reversing a 0.1% increase from November. The index showed no change overall in the second half of 2025, compared to 1.2% growth in the first half of that year.
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