By Jorge Vazquez
Dec 27, 2023, 09:22 AM EST
The Conference Board’s Leading Economic Index (LEI) for the US decreased 0.5% in November 2023 to 103.0, following a (revised downward) decline of 1.0 percent in October.
The LEI contracted 3.5% during the six-month period between May and November 2023, a smaller decline than its 4.3% contraction during the previous six months (November 2022 to May 2023).
“The US LEI continued to decline in November, with stock prices making virtually the only positive contribution to the index in the month,” said Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board. .
“Housing and labor market indicators weakened in November, reflecting warning areas for the economy. The Leading Credit Index and new manufacturing orders were essentially unchanged, pointing to a lack of economic growth momentum in the near term,” added Zabinska-La Monica.
Despite the current resilience of the economy and improving consumer confidence in December, the US LEI suggests a slowdown in economic activity ahead, as a result, The Conference Board forecasts a short, shallow recession in the first half of 2024.
The Conference Board’s Coincident Economic Index (CEI) for the US rose 0.2% in November 2023 to 111.2, after being unchanged in October. The CEI is now up 1.0% over the six-month period between May and November 2023, compared to growth of 0.7 percent over the previous six months.
The indicators that make up the CEI (wage employment, personal income less transfer payments, manufacturing and commercial sales, and industrial production) are included among the data used to determine recessions in the United States.
All four components of the index were positive in November, with personal income minus transfer payments contributing the most, followed by much smaller positive contributions from the remaining three components.
For its part, the Conference Board’s Lagging Economic Index (LAG) for the US increased 0.5% in November 2023 to 119.2, after an increase of 0.3% in October. LAG increased by 0.8% during the six-month period from May to November 2023, an improvement compared to growth of 0.5% during the previous six months.
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