Line chart showing the year-over-year percent change of an index of leading economic indicators from January 1960 to November 2023. The index has been on a downtrend since early 2021, with such downtrends in the past typically being tied to an approaching recession. The index bottomed in late 2023 but remains negative.
Sources: Bloomberg and Wells Fargo Investment Institute. Monthly data from January 1, 1960 to November 30, 2023. The Conference Board Leading Economic Index® (LEI) is a composite average of 10 leading indicators in the U.S. It is one of the key elements in the Conference Board's analytic system, which is designed to signal peaks and troughs in the business cycle.
Key Takeaways
- Declines in the Index of Leading Economic Indicators (or LEI) have historically preceded recessions.
- Recession warnings are flashing from 20 straight monthly declines in the leading economic indicators (LEI). Increases in the ratio of coincident to lagging indicators, often foreshadowing changes in the LEI, point toward improvement ahead, but likely not soon enough to prevent an economic slowdown.