For the First Time in Two Years, Leading Indicators No Longer Point to a Recession

A typically reliable economic touchstone is no longer indicating a looming recession.

The Leading Economic Index compiled each month by the Conference Board has been warning for two years that a recession was approaching. In January, the recession warning was lifted, the Conference Board said.

“The U.S. LEI fell further in January, as weekly hours worked in manufacturing continued to decline and the yield spread remained negative,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024). As a result, the leading index currently does not signal recession ahead. While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”

In other words, the long-awaited recession is over before it even began.