September’s Curiosity Conference Board Leading Index Falls More Than Expected at -0.7% Instead of -0.4% Anticipated

Leading economic indicator for September:

• Prior month -0.5% revised from -0.4%
• Leading index for September -0.7% versus -0.4% expected
• The decline is the 18th month in a row

The only positive was the initial jobless claims. All the other leading indicators point to lower growth ahead (again)

Coincident indicators:

• The Conference Board Coincident Economic Index (CEI) for the U.S. increased by 0.3% in September 2023 to 110.9 (2016=100).
• This follows a 0.1% increase in August.
• The CEI has shown a 1.1% growth over the six-month period from March to September 2023, in contrast to the 0.4% growth in the previous six months.
• The CEI comprises four component indicators: payroll employment, personal income less transfer payments, manufacturing trade and sales, and industrial production.
• In September, all four components of the index advanced, with personal income less transfer payments and employees on nonagricultural payrolls being the strongest contributors.
• Industrial production and manufacturing and trade sales also contributed positively.
• The recent six-month improvement in the CEI suggests that current economic activity in the U.S. remains positive.

Lagging Economic Index:

• The Conference Board Lagging Economic Index (LAG) for the U.S. increased by 0.2% in September 2023 to 118.5 (2016=100).
• However, it remains unchanged from the previous month due to data revisions that lowered the readings for June, July, and August.
• Over the six-month period from March to September 2023, the LAG has seen a slight 0.1% growth.
• This is a significant decrease from its 1.2% growth over the preceding six months.

Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board said:

“The LEI for the US fell again in September, marking a year and a half of consecutive monthly declines since April 2022. In September, negative or flat contributions from nine of the index’s ten components more than offset fewer initial claims for unemployment insurance. Although the six-month growth rate in the LEI is somewhat less negative, and the recession signal did not sound, it still signals the risk of economic weakness ahead. So far, the US economy has shown considerable resilience despite pressures from rising interest rates and high inflation. Nonetheless, The Conference Board forecasts that this trend will not be sustained for much longer, and a shallow recession is likely in the first half of 2024.”

At some point, there will be slower growth….

Meanwhile, the Atlanta FED GDPNow estimated at 5.4%, and although private estimates are lower, the model has been successful in predicting growth over the last few quarters in the US.