US Leading Economic Index Shows Slight Decrease in December 2024, Signaling Economic Trends
The Conference Board Leading Economic Index® (LEI) for the United States has experienced a slight decline of 0.1% in December 2024, settling at a value of 101.6 (2016=100). This decline follows a revised increase of 0.4% recorded in November. Over the second half of 2024, the LEI has decreased by 1.3%, a minor improvement compared to the 1.7% drop witnessed during the earlier part of the year.
Justyna Zabinska-La Monica, Senior Manager for Business Cycle Indicators at The Conference Board, stated, “The Index fell slightly in December, failing to sustain November’s increase.” Factors contributing to this downturn include a dip in consumer confidence regarding future business conditions, stagnant manufacturing orders, a rise in initial claims for unemployment benefits, and a fall in building permits. Despite this, there were positive contributions from half of the index's ten components in December, suggesting that not all areas are facing downturns.
While the LEI presents a cautious outlook, it's worth noting that its six-month and twelve-month growth rates have recorded less severe declines. This indicates fewer obstacles to economic activity in the near future. Furthermore, The Conference Board forecasts a growth momentum at the beginning of the year, anticipating a 2.3% expansion of real GDP in the United States for 2025.
In contrast, the Conference Board Coincident Economic Index® (CEI) indicated positive growth, rising by 0.4% in December to reach 114.1 (2016=100), backed by increases in key indicators such as payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production. The CEI's growth serves to highlight current economic conditions, showing a modest acceleration in the latter half of 2024, with a total increase of 0.9% over the last six months, compared to a lower 0.7% growth from earlier that year.
On the other hand, the Lagging Economic Index® (LAG) showed a slight increase of 0.1%, rising to 118.5 (2016=100) after a previous gain of 0.2% in November. However, it is noteworthy that the LAG has recorded a negative growth rate of 0.5% over the past six months, indicating enduring challenges in some economic sectors.
The forthcoming release of the LEI and related indexes is scheduled for February 20, 2025, and it will incorporate annual benchmark revisions to provide the latest updates reflecting recent trends in the data.
The composite economic indexes play a critical role in analyzing the business cycle, where the LEI notably serves as a predictive tool steering towards expected turning points. Comprised of ten components, including average weekly hours in manufacturing and consumer expectations, it aims to provide a clearer lens into the economic future.
As businesses and analysts look ahead, understanding these indexes is crucial for navigating fluctuating economic conditions as well as preparing for potential changes in the landscape. For more details and in-depth analysis, one can visit the Conference Board's website at conference-board.org.
Justyna Zabinska-La Monica, Senior Manager for Business Cycle Indicators at The Conference Board, stated, “The Index fell slightly in December, failing to sustain November’s increase.” Factors contributing to this downturn include a dip in consumer confidence regarding future business conditions, stagnant manufacturing orders, a rise in initial claims for unemployment benefits, and a fall in building permits. Despite this, there were positive contributions from half of the index's ten components in December, suggesting that not all areas are facing downturns.
While the LEI presents a cautious outlook, it's worth noting that its six-month and twelve-month growth rates have recorded less severe declines. This indicates fewer obstacles to economic activity in the near future. Furthermore, The Conference Board forecasts a growth momentum at the beginning of the year, anticipating a 2.3% expansion of real GDP in the United States for 2025.
In contrast, the Conference Board Coincident Economic Index® (CEI) indicated positive growth, rising by 0.4% in December to reach 114.1 (2016=100), backed by increases in key indicators such as payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production. The CEI's growth serves to highlight current economic conditions, showing a modest acceleration in the latter half of 2024, with a total increase of 0.9% over the last six months, compared to a lower 0.7% growth from earlier that year.
On the other hand, the Lagging Economic Index® (LAG) showed a slight increase of 0.1%, rising to 118.5 (2016=100) after a previous gain of 0.2% in November. However, it is noteworthy that the LAG has recorded a negative growth rate of 0.5% over the past six months, indicating enduring challenges in some economic sectors.
The forthcoming release of the LEI and related indexes is scheduled for February 20, 2025, and it will incorporate annual benchmark revisions to provide the latest updates reflecting recent trends in the data.
The composite economic indexes play a critical role in analyzing the business cycle, where the LEI notably serves as a predictive tool steering towards expected turning points. Comprised of ten components, including average weekly hours in manufacturing and consumer expectations, it aims to provide a clearer lens into the economic future.
As businesses and analysts look ahead, understanding these indexes is crucial for navigating fluctuating economic conditions as well as preparing for potential changes in the landscape. For more details and in-depth analysis, one can visit the Conference Board's website at conference-board.org.
Topics General Business）
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