- Prior month 0.1%
- Leading economic index -0.2% versus -0.1% estimate
Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board said:
“In June, the Leading Economic Index (LEI) for the US declined and partially reversed gains registered in May and April. While some components of the LEI were little changed, the largest positive contribution from the yield spread, followed by marginal positive input from the remaining financial components, were not enough to offset weak consumer expectations and a drop in building permits across most of its categories. Despite the recent decline, the LEI’s six- and twelve-month growth rates, while negative, were stable. Consumer spending is weakening, but strong business investment related to AI is expected to support economic activity while inflation continues to improve. The Conference Board raised its forecast from 1.8% to 1.9% y/y GDP growth for 2026.”
Looking at the coincident and lagging indicators from the conference Board:
- The Coincident Economic Index (CEI) rose 0.2% in June to 114.6, matching the 0.2% increase recorded in May.
- The CEI increased 0.4% during the first half of 2026, slightly stronger than the 0.3% gain in the previous six months.
- All four components of the CEI—payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production—contributed positively in June.
- The Lagging Economic Index (LAG) was unchanged at 120.5 in June after slipping 0.1% in May.
- Despite the flat June reading, the LAG advanced 1.1% during the first half of 2026, reversing the 0.1% decline recorded in the second half of 2025.
- Overall, the data suggest current economic activity remained on a steady upward path in June, while leading signs from the lagging index point to improved economic momentum compared with late 2025.
The Conference Board’s June data paint a picture of an economy that continues to expand, but at a modest pace. The Leading Economic Index (LEI) fell 0.2%, a weaker result than the -0.1% expected, partially reversing gains from the prior two months. The decline reflects softer consumer expectations and weaker building permits, signaling that consumer-driven growth and the housing sector remain areas of concern. However, improving financial conditions, easing inflation, and robust business investment tied to artificial intelligence are helping to offset those headwinds, prompting The Conference Board to raise its 2026 GDP growth forecast to 1.9% from 1.8%. Meanwhile, the Coincident Economic Index (CEI), which measures current economic conditions, rose 0.2% for a second straight month as all four of its components—including employment, income, industrial production, and sales—improved, indicating that the economy remains on solid footing today. The Lagging Economic Index (LAG) was unchanged in June but continues to trend higher over the first half of the year, suggesting that underlying economic momentum has improved compared with late 2025. Overall, the report points to continued, moderate economic growth rather than an imminent recession, with AI-related business investment helping to offset softer consumer demand and housing activity.
The index has also been consistently negative for years suggesting a recession is just around that corner which has never happened. As a result, the market tends to discount the index has not being that relevant.
