Leading Economic Indicators

July 2023 Update

In July 2023, the Conference Board Leading Economic Index® (LEI) fell 0.4%, following a 0.7% decline in June. July marked the sixteenth consecutive decline in the index. Three of the ten LEI indicators made a positive contribution: 1) the S&P 500 Index; 2) weekly initial unemployment insurance claims; and 3) manufacturers’ new orders. During the six-month period from January 2023 through July 2023, the LEI declined by 4.0%, slightly faster than the 3.7% drop observed in the previous six-month period.

“The leading index continues to suggest that economic activity is likely to decelerate and descend into mild contraction in the months ahead. The Conference Board now forecasts a short and shallow recession in the Q4 2023 to Q1 2024 timespan."

-Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board

Source: The Conference Board

Source: The Conference Board

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The Coincident Economic Index® (CEI), a measure of current economic activity, edged 0.4% higher in July, following a flat 0% reading in June. Looking at the six-month period between January 2023 and July 2023, the CEI rose 0.7%, slightly lower than the 0.9% growth experienced in the preceding six-month period. Strength within the CEI components remained widespread with all four components increasing.

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The ongoing recovery in the services economy continues to outweigh the recessionary signals emanating from the goods economy. This is attributed to the dramatic post-COVID shift in consumer spending patterns. The Atlanta Fed GDPNow is estimating third-quarter real GDP growth of 5.8%.