LEI & CPI Update
The Leading Economic Index (LEI) fell 0.6% and the Consumer Price Index (CPI) rose 0.3% in the month of April.
LEADING ECONOMIC INDICATORS :: APRIL 2024
The Conference Board Leading Economic Index® (LEI) dropped 0.6% in April, following a 0.3% decline in March. Over the six months from October 2023 to April 2024, the LEI contracted by 1.9%, an improvement from the 3.5% decline in the previous six-month period.
“While the LEI’s six-month and annual growth rates no longer signal a forthcoming recession, they still point to serious headwinds to growth ahead. Indeed, elevated inflation, high interest rates, rising household debt, and depleted pandemic savings are all expected to continue weighing on the US economy 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), which gauges present economic conditions, increased by 0.2% in April, the same increase as in March. From October 2023 to April 2024, the CEI rose 0.9%, up slightly from the 0.8% rate of growth observed in the previous six months. All four CEI components rose in April.
CONSUMER PRICE INDEX (CPI) | APRIL 2024 UPDATE
The April Consumer Price Index (CPI) Inflation Report showed headline CPI rose 0.3% in April following a 0.4% increase in March. Over the most recent 12-month period, headline CPI is up 3.4%. The core CPI, which excludes the volatile food and energy components, rose 0.3% in April and is up 3.6% over the most recent 12-month period.
Headline and core inflation rates above 3% year-over-year are too high for the FOMC to lower the fed funds rate, especially with the unemployment rate below 4%. Fed Chair Powell identified two potential paths to rate cuts this year: 1) inflation moves toward the Fed’s 2% target level; 2) the labor market weakens, resulting in higher unemployment. If inflation moves sideways and the labor market continues its current strength, Chair Powell seems content to keep current monetary policy in place for the foreseeable future. The next FOMC meeting is scheduled for June 11th and 12th. The meeting will include an updated Summary of Economic Projections from FOMC members.
The CME FedWatch Tool shows market participants anticipating the initial federal funds rate cut at either the September 18th or November 7th meeting.
In case you missed it, we shared our favorite money market and CD rates last weekend.
Upcoming U.S. Treasury Bills auctions:
Upcoming U.S. Treasury Notes auctions:
Upcoming 10-year TIPS auction reopening: