Conference Board Leading Economic Index: Slight Decrease in December
The Latest Conference Board Leading Economic Index (LEI) for December is now available. The index decreased 0.2 percent to 123.7 from November's revised 123.9. The latest indicator value came in below the -0.1 percent forecast by Investing.com.
Here is an overview from the LEI press release:
The Conference Board Leading Economic Index® (LEI) for the US declined 0.2 percent in December to 123.7 (2010 = 100), following a 0.5 percent increase in both November and October. [Full notes in PDF]
Here is a chart of the LEI series with documented recessions as identified by the NBER.
For additional perspective on this indicator, see the latest press release, which includes this overview:
"The US LEI fell slightly in December, led by a drop in housing permits and weak new orders in manufacturing," said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. "However, the index continues to suggest moderate growth in the near-term despite the economy losing some momentum at the end of 2015. While the LEI's growth rate has been on the decline, it’s too early to interpret this as a substantial rise in the risk of recession."
For a better understanding of the relationship between the LEI and recessions, the next chart shows the percentage off the previous peak for the index and the number of months between the previous peak and official recessions.
LEI and Its Six-Month Smoothed Rate of Change
Based on suggestions from Neile Wolfe of Wells Fargo Advisors, LLC and Dwaine Van Vuuren of RecessionAlert, we can tighten the recession lead times for this indicator by plotting a smoothed six-month rate of change to further enhance our use of the Conference Board's LEI as gauge of recession risk.
As we can see, the LEI has historically dropped below its six-month moving average anywhere between 2 to 15 months before a recession. The latest reading of this smoothed rate-of-change suggests no near-term recession risk.
About Jill Mislinski
Jill Mislinski Archive
|09/27/2016||Consumer Confidence Highest Since Recession||story|
|09/23/2016||Conference Board Leading Economic Index Declined in August, Disappoints Expectations||story|
|09/15/2016||Retail Sales Disappoint…Again||story|
|09/02/2016||ECRI Weekly Leading Index at Multi-Year Highs||story|
|08/23/2016||July New Home Sales Soar to 12.4% Month-over-Month, Surprises Forecast||story|
|08/11/2016||Weekly Unemployment Claims: Down 1K From Last Week||story|
|08/02/2016||Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator||story|
|06/30/2016||Regional Fed Manufacturing Overview: June Decline||story|
|06/28/2016||Consumer Confidence Rebounds in June||story|
|06/23/2016||Conference Board Leading Economic Index: Decrease in May||story|