LEADING ECONOMIC INDICATORS :: OCTOBER 2023
The Conference Board Leading Economic Index® (LEI) fell 0.8% in October following a 0.7% decline in September, marking the nineteenth consecutive decline in the index. During the six months from April 2023 through October 2023, the LEI declined by 3.3%, an improvement from the 4.5% decline observed in the previous six-month period. Eight of the ten LEI components were flat or negative during the month, with only two components (building permits and manufacturer’s new orders) increasing.
“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 percent in 2024.”
-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), a measure of current economic activity, was unchanged in October. Looking at the six months between April 2023 and October 2023, the CEI rose 0.9%, up from the 0.4% pace during the preceding six-month period. Three of the four CEI components increased in October.
FEDERAL RESERVE UPDATE
The next Federal Open Market Committee (FOMC) meeting is scheduled for December 12th and 13th. There is virtually no chance of a rate hike at that meeting and it appears increasingly likely that the Fed is done raising interest rates. We will get a new Summary of Economic Projections (SEP) at the December meeting which will include updated Fed forecasts for Gross Domestic Product, Unemployment, PCE inflation, and the federal funds rate. We do not expect any change in monetary policy at the December FOMC meeting.