US Leading Economic Index Continues Downward Trend in December 2025
The Conference Board's Leading Economic Index® (LEI) for the United States experienced a decline of 0.2% in December 2025, settling at 97.6, with a base year of 2016 set to 100. This marks a continuation of a downward trend, following a 0.3% reduction in November and a previously revised decline of 0.2% in October. Over the second half of the year, the LEI fell by a total of 1.2%, a notable improvement compared to the more substantial 2.8% contraction noted during the first half of 2025.
Justyna Zabinska-La Monica, Senior Manager of Business Cycle Indicators at The Conference Board, commented on the sustained weakness in the economic landscape. December recorded the fifth consecutive month of decline for the LEI, indicating a continued economic softness as we entered 2026.
However, there were some positives interspersed within the data. A notable increase in building permits suggests potential investment and infrastructure development, while the financial components of the LEI, particularly the yield spread, turned positive in both November and December. Unfortunately, the positive aspects were overshadowed by persistent weaknesses reflected in consumer expectations and the ISM® New Orders Index, both of which contributed significantly to the LEI's decline.
Labor market data further complicated the outlook, with rising unemployment claims and reduced average weekly hours reported in the manufacturing sector. This combination of factors indicates that initial economic activity may be weaker as we start the year. The Conference Board has adjusted its projections, anticipating a growth slowdown for the fourth quarter of 2025 and early 2026, forecasting a GDP increase of 2.1% year-over-year for 2026, modestly down from the anticipated 2.2% for 2025.
In contrast, the Coincident Economic Index® (CEI) for the US saw a rise of 0.2% in December 2025, bringing it to 115.0. This positive development follows a previously revised 0.1% uptick in November. Overall, the CEI expanded by 0.3% throughout the second half of 2025, slightly lower than the 0.4% growth reported in the first half. The CEI is drawn from multiple indicators, including payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production, all of which showed improvements in December.
On the other hand, the Lagging Economic Index® (LAG) recorded a minor decline of 0.1%, falling to 119.6. This reverses its earlier gain of the same percentage in November.
Looking to the future, the next release from the Conference Board will depend on forthcoming announcements from the Census Bureau regarding data points crucial for evaluating economic conditions. As these economic indicators continue to fluctuate, they offer a clear signal of the current climate and potential future projections for recovery or deterioration in the US economy.
The LEI comprises ten components—Average weekly hours in manufacturing, unemployment claims, new orders from manufacturers, the ISM® Index of New Orders, orders for nondefense capital goods, building permits, the SP 500® Index, the Leading Credit Index™, interest rate spreads, and consumer business condition expectations. Meanwhile, the four components of the CEI include payroll employment, personal income, manufacturing and trade sales, and industrial production. These indexes are crucial analytical tools for outlining current performance and anticipating potential shifts in the economic cycle, thus providing vital guidance for businesses and policymakers alike.
Justyna Zabinska-La Monica, Senior Manager of Business Cycle Indicators at The Conference Board, commented on the sustained weakness in the economic landscape. December recorded the fifth consecutive month of decline for the LEI, indicating a continued economic softness as we entered 2026.
However, there were some positives interspersed within the data. A notable increase in building permits suggests potential investment and infrastructure development, while the financial components of the LEI, particularly the yield spread, turned positive in both November and December. Unfortunately, the positive aspects were overshadowed by persistent weaknesses reflected in consumer expectations and the ISM® New Orders Index, both of which contributed significantly to the LEI's decline.
Labor market data further complicated the outlook, with rising unemployment claims and reduced average weekly hours reported in the manufacturing sector. This combination of factors indicates that initial economic activity may be weaker as we start the year. The Conference Board has adjusted its projections, anticipating a growth slowdown for the fourth quarter of 2025 and early 2026, forecasting a GDP increase of 2.1% year-over-year for 2026, modestly down from the anticipated 2.2% for 2025.
In contrast, the Coincident Economic Index® (CEI) for the US saw a rise of 0.2% in December 2025, bringing it to 115.0. This positive development follows a previously revised 0.1% uptick in November. Overall, the CEI expanded by 0.3% throughout the second half of 2025, slightly lower than the 0.4% growth reported in the first half. The CEI is drawn from multiple indicators, including payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production, all of which showed improvements in December.
On the other hand, the Lagging Economic Index® (LAG) recorded a minor decline of 0.1%, falling to 119.6. This reverses its earlier gain of the same percentage in November.
Looking to the future, the next release from the Conference Board will depend on forthcoming announcements from the Census Bureau regarding data points crucial for evaluating economic conditions. As these economic indicators continue to fluctuate, they offer a clear signal of the current climate and potential future projections for recovery or deterioration in the US economy.
The LEI comprises ten components—Average weekly hours in manufacturing, unemployment claims, new orders from manufacturers, the ISM® Index of New Orders, orders for nondefense capital goods, building permits, the SP 500® Index, the Leading Credit Index™, interest rate spreads, and consumer business condition expectations. Meanwhile, the four components of the CEI include payroll employment, personal income, manufacturing and trade sales, and industrial production. These indexes are crucial analytical tools for outlining current performance and anticipating potential shifts in the economic cycle, thus providing vital guidance for businesses and policymakers alike.
Topics Financial Services & Investing）
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