The Conference Board Leading Economic Index for the US continued to signal headwinds to economic growth ahead. 

“In August, the US Leading Economic Index remained on a downward trajectory and posted its sixth consecutive monthly decline,” Justyna Zabinska-La Monica, senior manager, business cycle indicators at The Conference Board, said in a press release.

The index fell 0.2% to a reading of 100.2 (2016=100) in August, following a 0.6% decline in July.

Over the six months between February and August of this year, the index contracted 2.3%, a smaller decrease than its 2.7% contraction between August 2023 and February 2024.

Zabinska-La Monica noted that August’s decline was driven by a drop in new orders, which recorded their lowest value since May 2023.

“A negative interest rate spread, persistently gloomy consumer expectations of future business conditions and lower stock prices after the early-August financial market tumult also weighed on the index,” she said.

The Conference Board expects US real GDP growth to lose momentum in the second half of the year as higher prices, elevated interest rates and mounting debt erode domestic demand.

However, the organization noted that in the Fed’s September 2024 Summary of Economic Projections, policymakers indicated that 100 basis points of interest rate cuts could occur by year end, lowering borrowing costs and supporting stronger economic activity in 2025.