US Leading Economic Index Declines in June

The Leading Economic Index (LEI) for the US fell by 0.2% in June, compared to an expected decline of 0.1%. This decrease partially reverses the gains recorded in May and April. Justyna Zabinska-La Monica, Senior Manager of Business Cycle Indicators at The Conference Board, noted that while some components of the LEI remained stable, the largest positive contribution came from the yield spread, alongside marginal positive inputs from financial components. However, these were insufficient to offset weaker consumer expectations and a drop in building permits across most categories.

Despite the decline in the LEI, its six- and twelve-month growth rates remain stable, albeit negative. Consumer spending is showing signs of weakness, but robust business investment in artificial intelligence is anticipated to bolster economic activity as inflation continues to ease. Consequently, The Conference Board has revised its forecast for GDP growth in 2026 from 1.8% to 1.9% year-on-year.

In contrast, the Coincident Economic Index (CEI) rose by 0.2% in June, matching the increase seen in May. The CEI has increased by 0.4% in the first half of 2026, slightly outpacing the 0.3% gain recorded in the previous six months. All four components of the CEI—payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production—contributed positively in June.

The Lagging Economic Index (LAG) remained unchanged at 120.5 in June, following a 0.1% decline in May. Despite this flat reading, the LAG advanced by 1.1% in the first half of 2026, reversing the 0.1% decline seen in the latter half of 2025.

Overall, the data suggests that current economic activity is on a steady upward trajectory, with improved momentum compared to late 2025. The report indicates continued moderate economic growth rather than an imminent recession, with AI-related business investment helping to mitigate the impact of weaker consumer demand and housing activity.