Leading Economic Indicators
March 2023
The Conference Board Leading Economic Index® (LEI) fell 1.2% in March, following a 0.5% decline in February. March was the twelfth consecutive monthly decline in the index. During the six-month period from September 2022 through March 2023, the LEI declined 4.5% versus a 3.5% decline in the prior six-month period. All but two LEI components fell. The two positive components were stock prices and manufacturers’ new orders for consumer goods. The LEI is at its lowest level since November 2020.
“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."
-Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board
Source: The Conference Board
Source: The Conference Board
The Coincident Economic Index (CEI) increased 0.2% in March, following a 0.2% increase in February. The CEI is up 0.8% over the prior six-month period. That is slightly lower than the 1.0% increase during the previous six-month period. Notably, the payroll employment component weakened in March.
Despite the LEI forecast for recession, the latest CME FedWatch shows a high probability of another fed funds rate hike at the upcoming May 2nd and 3rd FOMC meeting. As of this writing, there is an 86% chance of a 25 basis point rate increase to a target range of 5.00% to 5.25% on May 3rd.
