The Conference Board Leading Economic Index for the US edged down 0.8% in October to a reading of 103.9 (2016=100). October’s decrease follows a decline of 0.7% in September.

“The US Leading Economic Index trajectory remained negative, and its six- and 12-month growth rates also held in negative territory in October,” Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board, said in a press release. 

Zabinska-La Monica noted that among the leading indicators, deteriorating consumers’ expectations for business conditions, lower ISM index of new orders, falling equities and tighter credit conditions drove the index’s most recent decline.

The LEI is now down 3.3% over the six months between April and October 2023, an improvement from its 4.5% contraction over the previous six months from October 2022 to April 2023.

“After a pause in September, the LEI resumed signaling a recession in the near term,” Zabinska-La Monica said. “The Conference Board expects elevated inflation, high interest rates and contracting consumer spending — due to depleting pandemic saving and mandatory student loan repayments — to tip the US economy into a very short recession. We forecast that real GDP will expand by just 0.8% in 2024.”

The Conference Board’s Leading Economic Index serves as an early indicator for significant shifts in the business cycle, providing insights into the near-term direction of the economy.