The U.S. Conference Board Leading Economic Index (LEI) inched down 0.3% to 110.3 in January, after decreasing by 0.8% in December (revised). The LEI has fallen 3.6% over the last six months, declining at a faster rate than in the six-month period that ended in July 2022 (-2.4%).

“The US LEI remained on a downward trajectory, but its rate of decline moderated slightly in January,” said Ataman Ozyildirim, The Conference Board’s Senior Director of Economics. Several leading indicators contributed to the index’s decline for the month, including the yield spread component, “which is often a signal of recession to come.”

After holding steady in December, the U.S. Coincident Economic Index went up 0.2% to 109.5 in January and has risen 0.7% over the last six months. Three of the four CEI component indicators — payroll employment, personal income less transfer payments, and manufacturing trade and sales — improved in January. Industrial production, the remaining component, was unchanged over the month. 

The Lagging Economic Index also rose 0.2% in January, reaching 118.5 after climbing 0.6% in December. The index has increased 2.8% over the past six months. 

“While the LEI continues to signal recession in the near term,” Ozyildirim added, “indicators related to the labor market — including employment and personal income — remain robust so far. Nonetheless, The Conference Board still expects high inflation, rising interest rates, and contracting consumer spending to tip the U.S. economy into recession in 2023.”