Link Securities| The Conference Board’s index of US leading economic indicators, the Leading Economic Index (LEI), declined 0.8% in October compared to September, after falling 0.7% in September. The FactSet consensus of analysts expected a decline of 0.6%. In the April to October time period (last 6 months) the LEI has contracted by 3.3%, a smaller decline than the 4.5% drop it experienced during the previous six months (October 2022 to April 2023).
According to analysts at the Conference Board, among leading indicators, deteriorating consumer expectations about business conditions, the weaker ISM new orders index, falling equities and tighter credit conditions drove the most recent decline in the index. In that sense, they point out that after a pause in September, the LEI resumed signs of recession in the coming years.
They also say that the Conference Board expects high inflation, high interest rates and a contraction in consumer spending (due to the depletion of savings during the pandemic and mandatory student loan payments) to push the US economy into a very brief recession. In that sense, these analysts now expect the US economy to expand by only 0.8% in 2024.
