The Recent Decline of the US Leading Economic Index: Analyzing October and November Trends

Understanding the Recent Decline of the Leading Economic Index (LEI) in the US

In late January 2026, the Conference Board released troubling data regarding the Leading Economic Index (LEI) for the United States, highlighting a continued downturn in October and November 2025. The LEI serves as a predictive measure designed to signal turning points in the economic cycle. With November's index falling by 0.3% to 97.9 (2016=100), after a 0.1% decrease in October, economists are increasingly concerned about the implications for the economic landscape.

Breakdown of the Economic Indicators

Over the period from May to November 2025, the LEI demonstrated a total decline of 1.2%. This contrasts sharply with the 2.6% contraction observed in the previous six-month span from November 2024 to May 2025, indicating a moderation in the pace of economic decline. Senior Manager Justyna Zabinska-La Monica noted that weakened consumer expectations were pivotal in driving the recent drops, particularly affecting new orders as a component of the LEI.

Interestingly, despite the apparent slowdown in the index, the US economy showcased strength within certain areas. The data revealed positive contributions from the labor market, specifically in initial claims for unemployment insurance and hours worked in manufacturing. This framework means that while consumers are showing caution, key elements in the job market could sustain a level of resilience.

Coincident and Lagging Indices

The Coincident Economic Index (CEI), representing current economic conditions, experienced a slight growth of 0.3% in November 2026, climbing to 115.0 (2016=100). This was a welcome recovery after three consecutive months of declines. The indicators that comprise the CEI, including payroll employment and personal income, have shown improvement, albeit at a slower rate than earlier in the year.

Conversely, the Lagging Economic Index (LAG) saw a marginal increase of 0.1% to 119.7, indicating a slight recovery from the previous month’s drop. However, over the six months between May and November, this index showed a 0.1% decline, further complicating the economic narrative.

The Future Outlook for the Economy

As we approach the new year, analysts are contemplating the impact of these economic indicators on future growth. Despite achieving a remarkable 4.4% real GDP growth in Q3 2025, the LEI suggests underlying weaknesses that could pose challenges ahead in 2026. Predictions indicate a potential slowdown, and sustained vigilance in monitoring economic behavior will be essential for stakeholders and policymakers alike.

The Importance of Economic Indexes

The LEI serves as an essential tool for anticipating shifts in economic cycles. It comprises ten key components, such as manufacturing hours and unemployment claims, which provide a holistic view of economic health. In contrast, the CEI focuses on real-time indicators reflecting current activities and trends. Monitoring these indexes allows for proactive approaches to potential economic challenges.

Conclusion

As the Conference Board prepares for its next announcement regarding economic indicators, the reverberations of the October and November declines will undoubtedly continue to shape discussions around US economic policy and forecasts. Stakeholders are encouraged to stay informed about these trends as they navigate the uncertainties of the upcoming year.