In June 2023, the Conference Board Leading Economic Index® (LEI) experienced a 0.7% decrease, following a 0.6% decline in May. Only two of the ten LEI indicators showed an increase: 1) the S&P 500 Index and 2) manufacturers’ new orders. This month’s decline marks the fifteenth consecutive monthly decrease in the index. From December 2022 to June 2023, the LEI declined by 4.2%, slightly faster than the 3.8% drop observed in the previous six-month period.
“June’s data suggests economic activity will continue to decelerate in the months ahead. We forecast that the US economy is likely to be in recession from Q3 2023 to Q1 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) was unchanged in June, following the 0.2% increase in May. Looking at the six-month period between December 2022 and June 2023, the CEI rose 0.6%, slightly lower than the 1.1% growth experienced in the preceding six-month period. Three of the four CEI components advanced during the past six months.
The Federal Open Market Committee (FOMC) is scheduled to meet next week on July 25th and 26th. A 25 basis point rate hike is expected, lifting the fed funds target rate to a range of 5.25% to 5.5%. Following the July meeting, the FOMC is scheduled to meet three more times in 2023 on September 19th & 20th, October 31st & November 1st, and December 12th & 13th. Both the September and December FOMC meetings will include updated Summary of Economic Projections (SEP). Based on the latest employment and inflation data, we think two more rate hikes are likely over the next four FOMC meetings.
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