US Leading Economic Indicators Tumble For 11th Straight Month, Signal Recession Imminent

The Conference Board’s Leading Economic Indicators (LEI) continued its decline in February, dropping 0.3% MoM (vs -0.3% exp).

  • The biggest positive contributor to the leading index was building permits at +0.39
  • The biggest negative contributor was average consumer expectations at -0.24

This is the 11th straight monthly decline in the LEI (and 12th month of 14) –  the longest streak of declines since ‘Lehman’ (22 straight months of declines from June 2007 to April 2008)

“The LEI for the US fell again in February, marking its eleventh consecutive monthly decline,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.

Negative or flat contributions from eight of the index’s ten components more than offset improving stock prices and a better-than-expected reading for residential building permits.

While the rate of month-over-month declines in the LEI have moderated in recent months, the leading economic index still points to risk of recession in the US economy.

The most recent financial turmoil in the US banking sector is not reflected in the LEI data but could have a negative impact on the outlook if it persists.

Overall, The Conference Board forecasts rising interest rates paired with declining consumer spending will most likely push the US economy into recession in the near term.”

Despite ‘soft landing’ hype, the LEI is showing no signs at all of ‘recovering’, hitting its lowest since Jan 2021…

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And on a year-over-year basis, the LEI is down 6.60% (worse than the 6.03% YoY in January) – but still close to its biggest YoY drop since 2008 (Lehman) outside of the COVID lockdown-enforced collapse…

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Not a good sign for GDP.

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The trajectory of the US LEI continues to signal a recession over the next 12 months

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Is this the cleanest view of The Fed’s tightening impact on the US economy?

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