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US’ leading economic index (LEI) fell by 0.5 per cent in May 2024, bringing the index down to 101.2, according to The Conference Board (TCB). This follows a 0.6 per cent decrease in April. Over the six-month period from November 2023 to May 2024, the LEI decreased by 2 per cent, a smaller contraction compared to the 3.4 per cent decline observed in the previous six months.
In contrast, the coincident economic index (CEI) for the US showed an increase of 0.4 per cent in May 2024, reaching 112.4, following a 0.1 per cent rise in April. The CEI grew by 0.6 per cent over the six-month period ending in May 2024, which is lower than the 1.0 per cent growth recorded in the previous six months. All four components of the CEI—payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production—improved last month, with industrial production contributing the most to the index.
Meanwhile, the lagging economic index (LAG) for the US slightly decreased by 0.1 per cent in May 2024, bringing it to 119.4, after a 0.3 per cent increase in April. Consequently, the LAG’s six-month growth rate softened to 0.7 per cent from November 2023 to May 2024, down from 0.8 per cent over the previous six months.
“The US LEI fell again in May, driven primarily by a decline in new orders and weak consumer sentiment about future business conditions,” said Justyna Zabinska-La Monica, senior manager, business cycle indicators, at The Conference Board. “While the index’s six-month growth rate remained firmly negative, the LEI doesn’t currently signal a recession. We project real GDP growth will slow further to under 1 percent (annualised) over Q2 and Q3 2024, as elevated inflation and high interest rates continue to weigh on consumer spending.”
Fibre2Fashion News Desk (DP)