US recession signal flashes again as LEI falls for 3rd straight month

The Conference Board Coincident Economic Index (CEI) for the US rose by 0.3 per cent in June 2025 to 115.1 (2016=100), after being unchanged in both May and April. The CEI rose by 0.8 per cent over the first half of this year, down from 1 per cent growth over the previous six months, The Conference Board said in a press release.

The CEI’s four component indicators—payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production—are included among the data used to determine recessions in the US. All components of the coincident index improved in June.

“The US LEI fell further in June. For a second month in a row, the stock price rally was the main support of the LEI. But this was not enough to offset still very low consumer expectations, weak new orders in manufacturing, and a third consecutive month of rising initial claims for unemployment insurance,” said Justyna Zabinska-La Monica, senior manager, business cycle indicators, at The Conference Board. “In addition, the LEI’s six-month growth rate weakened, while the diffusion index over the past six months remained below 50, triggering the recession signal for a third consecutive month.”

“At this point, The Conference Board does not forecast a recession, although economic growth is expected to slow substantially in 2025 compared to 2024. Real GDP is projected to grow by 1.6 per cent this year, with the impact of tariffs becoming more apparent in H2 as consumer spending slows due to higher prices,” added Zabinska-La Monica.

The Conference Board Lagging Economic Index (LAG) for the US was unchanged at 119.9 (2016=100) in June 2025, after increasing by 0.4 per cent in May. The LAG’s six-month growth rate was also positive at 1.4 per cent between December 2024 and June 2025—reversing a -0.8 per cent decline over the previous six months (June–December 2024).

A strong rally in stock prices could not counterbalance the negative effects of subdued consumer confidence and weak new orders. The LEI’s sluggish growth rate and sub-50 diffusion index over the past six months activated the recession signal for the third month in a row in June.

ALCHEMPro News Desk (SG)