#USA #New York #The Conference Board #Leading Economic Index #Coincident Economic Index

Economic Insights: U.S. Leading Economic Index Trends in January 2026

In January 2026, the U.S. Leading Economic Index (LEI) contracted slightly by 0.1%, bringing its value down to 97.5 (with 2016 serving as the base year set at 100). This drop follows a 0.2% decrease recorded in December 2025. Such movements in the LEI are critical as they signal potential future movements in the economy.

To put this into perspective, the LEI has seen an overall decline of 1.3% over the six-month span from July 2025 to January 2026. This contraction rate, however, is tempered when compared to the more significant 2.6% drop noted in the previous six-month period leading up to July 2025.

The latest data release by The Conference Board underscores ongoing economic headwinds, particularly fueled by dwindling consumer expectations. Justyna Zabinska-La Monica, Senior Manager for Business Cycle Indicators at The Conference Board, noted, "The U.S. LEI fell further in January, as consumer expectations retreated again and building permits softened."

Despite this decline, there are noteworthy aspects to consider. The latest indexes indicate that between November 2025 and January 2026, seven out of the ten components of the LEI advanced, thus reflecting some underlying strengths in certain economic segments, showing resilience amidst broader downturns.

It's important to note that the LEI data for January does not yet account for the geopolitical tensions resulting from the war in Iran. Consequently, The Conference Board has adjusted its GDP growth forecast downward by 0.1 percentage points, now anticipated to reach 2.0% year-over-year in 2026. This figure is lower than the GDP growth rate for 2025, indicating a cautionary outlook moving forward.

Interestingly, the Conference Board Coincident Economic Index (CEI), which reflects current economic conditions, increased by 0.3% in January, rising to 115.3. This moderate uptick follows a 0.2% rise in December. Over the same six-month period, the CEI also experienced a steady expansion of 0.3%, mirroring the growth pattern observed in the previous half-year.

The CEI's four key indicators—payroll employment, personal income minus transfer payments, manufacturing and trade sales, and industrial production—are essential in gauging recession indicators in the U.S. economy. Encouragingly, all components registered improvements in January.

Adding to this complexity, the Lagging Economic Index (LAG) also rose by 0.3%, bringing the index to a total of 120.0, recovering more than its previous 0.2% decrease. Consequently, the LAG noted a six-month positive change of 0.5% for the first time since October 2025, potentially indicating that the prior economic declines are stabilizing.

In conclusion, while the U.S. Leading Economic Index has registered a slight decrease, signs of resilience persist. The interplay between the LEI, CEI, and LAG presents a nuanced view of the economic landscape, revealing that although some components have softened, several indicators still point towards potential growth. The forthcoming data releases will be pivotal in assessing the true impact of ongoing global and economic events on these indexes and the broader U.S. economy.