The Conference
Board announced on Friday that its Leading Economic Index (LEI) for the U.S. edged
down 0.1 per cent m-o-m in May to 99.0 (2016=100), following a downwardly revised
1.4 m-o-m drop (from -1.0 per cent m-o-m) in April.
Economists had expected
a slip of
0.1 per cent m-o-m.
The report also
revealed the Conference Board Coincident Economic Index (CEI) for the U.S. ticked
up 0.1 per cent m-o-m to 115.1
in May after an upwardly
revised 0.2 per cent m-o-m gain (from +0.1
per cent m-o-m) in the previous month. Meanwhile, its Lagging Economic Index
(LAG) for the U.S. advanced 0.4 per
cent m-o-m to 119.6, following an unrevised 0.3 per cent m-o-m rise in
April.
Commenting on
the latest data, Justyna Zabinska-La Monica, Senior Manager, Business Cycle
Indicators at the Conference Board, noted that the recovery of stock prices
after the April drop was the main positive contributor to the Index. “However,
consumers’ pessimism, persistently weak new orders in manufacturing, a second
consecutive month of rising initial claims for unemployment insurance, and a
decline in housing permits weighed on the Index, leading to May’s overall
decline,” she added. “With the substantial negatively revised drop in April and
the further downtick in May, the six-month growth rate of the Index has become
more negative, triggering the recession signal.”
Zabinska-La
Monica, however, added that the Conference Board does not anticipate recession,
but expects a significant slowdown in economic growth in 2025 compared to 2024,
with real GDP growing at 1.6% this year and persistent tariff effects
potentially leading to further deceleration in 2026.