A recent report from the Conference Board, released on Friday, reveals that U.S. leading economic indicators fell more sharply than anticipated in May.
According to the Conference Board, the leading economic index dropped by 0.5 percent in May, following a 0.6 percent decline in April. Economists had forecasted a more modest decline of 0.3 percent.
Over the six-month period from November 2023 to May 2024, the index decreased by 2.0 percent, which is an improvement compared to a 3.4 percent contraction in the prior six months.
"The U.S. Leading Economic Index (LEI) declined again in May, primarily due to a drop in new orders, weak consumer sentiment regarding future business conditions, and fewer building permits," noted Justyna Zabinska-La Monica, Senior Manager for Business Cycle Indicators at The Conference Board.
"Despite the LEI's ongoing negative growth rate over six months, it does not currently indicate an impending recession," she continued. "We expect real GDP growth to slow further to below 1 percent annualized for Q2 and Q3 2024, as elevated inflation and high interest rates continue to dampen consumer spending."
The report also highlighted that the lagging economic index edged down by 0.1 percent in May, after a 0.3 percent increase in April.
Conversely, the coincident economic index rose by 0.4 percent in May, following a slight increase of 0.1 percent in the previous month.
