The Conference Board Leading Economic Index (LEI) is a composite index which is composed of ten indices which are thought to be sensitive to changes in the US economy. The Conference Board describes it as an index which attempts to signal peaks and troughs and turning points in the index have historically occurred prior to changes in aggregate economic activity. Recently, month on month changes in the LEI have produced flat or negative results, interspersed with the odd spike. The latest report contains more of the former rather than the latter.
The Leading Economic Index remained flat in August, less than the expected +0.1% and a marked drop from July’s revised figure of +0.4%. As such, on an annual basis the LEI slowed down from July’s growth rate of 1.8% to 1.3%.
Changes over time can be large but once they are standardised, a clearer relationship with GDP emerges.
Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board said, “The recent trends in the LEI are consistent with a slow but still expanding economy, which has been primarily driven by strong consumer spending and robust job growth.”