Leading economic indicators are pointing toward a recession
- Prior month -0.3% revised to -0.5%
- Leading index for March -1.2% versus -0.6% expected
- The index is down for the 12 consecutive month
- The LEI is down 4.5 percent over the six-month period between September 2022 and March 2023—a steeper rate of decline than its 3.5 percent contraction over the previous six months (March–September 2022).
- The index is at its lowest level since November 2020.
- Coincident economic index increased 0.2% after a 0.2% rise in February
- the lagging economic index fell -0.2% following a 0.2% rise in February
Comments from conference boards Justyna Zabinska-La Monica:
“The weaknesses among the index’s components were widespread in March and have been so over the past six months, which pushed the growth rate of the LEI deeper into negative territory. Only stock prices and manufacturers’ new orders for consumer goods and materials contributed positively over the last six months. The Conference Board forecasts that economic weakness will intensify and spread more widely throughout the US economy over the coming months, leading to a recession starting in mid-2023.”
The leading index is certainly pointing toward lower economic growth going forward. Looking at the chart above, the sharp fall foreshadows lower economic growth/recessions. How did the recession is going to be is another question.
