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 been largely negative.
The Leading Economic Index slipped by 0.1% during October, in line with expectations but more than September’s revised figure of -0.2%. On an annual basis, the LEI accelerated a little from September’s growth rate of 0.3% to 0.5%.
The Conference Board’s Senior Director of Economic Research, Ataman Ozyildirim, said the US economy will “end the year on a weak note” with a growth rate of a little under 2%. He said the labour market had softened and “conditions in manufacturing remain weak and show no signs of improvement yet.”
Changes over time can be large but once they are standardised, a clearer relationship with GDP emerges. The latest reading implies a year-on-year growth rate of just 1.3% at the end of the March 2020 quarter.