USA (Washington Insider Magazine)—In March 2024, the US Leading Economic Index (LEI) saw a decrease of 0.3%, settling at 102.4. This decrease comes after a modest increase of 0.2% in February, according to the latest report from The Conference Board, a renowned think tank specialising in economic analysis.
During the six months spanning from September 2023 to March 2024, the LEI contracted by 2.2%, marking a smaller decline than the 3.4% drop observed in the preceding six months.
Expert Insights
“Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board, pointed out, ‘February’s US LEI rally turned out to be short-lived, as the index showed a decline in March. Monica traced this decline to negative contributions from several factors, including the yield spread, new construction permits, consumer outlooks on business conditions, new orders, and initial unemployment insurance claims,” the report stated.
Assessment and Outlook
While the LEI’s annual and semi-annual growth rates remain negative, the report highlights that the pace of contraction has slowed. It shows a delicate outlook for the US economy, with risks presented by rising consumer debt, high-interest rates, and persistent inflationary pressures.
Forecasts
The report suggests that economic growth will decelerate following a period of rapid expansion in the latter half of 2023. As consumer spending slows, GDP growth is anticipated to moderate in the second and third quarters of 2024.
Coincident and Lagging Indicators
In March 2024, the Conference Board’s Coincident Economic Index (CEI) for the US saw a 0.3% rise to 112.0, following a 0.1% increase in February. This change led to a 0.6% increase in the CEI over the six months ending in March 2024. Meanwhile, the US Lagging Economic Index (LAG) remained unchanged at 119.0 in March 2024, after a 0.3% increase in February.
Significance of CEI and LAG
According to Eldiariony, the indicators comprising the Conference Board’s Coincident Economic Index (CEI), including wage employment, personal income less transfer payments, manufacturing and commercial sales, and industrial production, are essential in demonstrating recessions in the United States. On the other hand, the LAG offers insights into the state of the economy currently.
The LEI serves as an early indicator of significant shifts in the business cycle and provides valuable insights into the near-term direction of the economy, while the CEI offers a snapshot of the current economic state.