Continuing its downward trend, the US Conference Board Leading Economic Index (LEI) fell 1.0% to 113.5 in November, after a 0.9% decrease in October (revised). Over the past six months, the LEI has declined 3.7%, a significantly higher drop than the previous six-month period (-0.8%).
Stock prices were the only positive contributor to November’s LEI, while labor market, manufacturing, and housing indicators brought it down, “reflecting serious headwinds to economic growth,” said Ataman Ozyildirim, Senior Director, Economics, at The Conference Board. “Interest rate spread and manufacturing new orders components were essentially unchanged in November, confirming a lack of economic growth momentum in the near term.”
The US Coincident Economic Index inched up 0.1% to 109.4 in November and has gone up 1.2% over the last six-month period. The Lagging Economic Index went up by 0.2% to 116.4 and has risen 2.7% within the past six months.
While these results indicate the labor market’s resilience, “the US LEI suggests the Federal Reserve’s monetary tightening cycle is curtailing aspects of economic activity, especially housing,” Ozyildirim said. “As a result, we project a US recession is likely to start around the beginning of 2023 and last through mid-year.”
