US LEI falls again in May, triggers recession signal: TCB

The LEI has fallen by 2.7 per cent in the six-month period ending May 2025, a much faster rate of decline than the 1.4 per cent contraction over the previous six months, The Conference Board said in a press release.

“The LEI for the US fell again in May, but only marginally. The recovery of stock prices after the April drop was the main positive contributor to the Index. However, consumers’ pessimism, persistently weak new orders in manufacturing, a second consecutive month of rising initial claims for unemployment insurance, and a decline in housing permits weighed on the Index, leading to May’s overall decline,” said Justyna Zabinska-La Monica, senior manager, business cycle indicators, at The Conference Board. “With the substantial negatively revised drop in April and the further downtick in May, the six-month growth rate of the Index has become more negative, triggering the recession signal.”

The Conference Board does not anticipate recession, but we do expect a significant slowdown in economic growth in 2025 compared to 2024, with real GDP growing at 1.6 per cent this year and persistent tariff effects potentially leading to further deceleration in 2026,” added Zabinska-La Monica.

Meanwhile, the Coincident Economic Index (CEI), which reflects current economic conditions, rose by 0.1 per cent to 115.1 in May, building on a 0.2 per cent increase in April. The CEI’s six-month growth accelerated to 1.3 per cent, more than doubling its prior pace. Industrial production was the sole lagging component in May.

The Lagging Economic Index (LAG) also showed positive momentum, rising 0.4 per cent to 119.6 in May, following a 0.3 per cent increase in April. Its six-month growth rate turned positive at 0.8 per cent, reversing a 0.3 per cent contraction seen between May and November 2024.

ALCHEMPro News Desk (SG)