The U.S. Leading Economic Index for April fell sharply, not yet reaching the recession threshold

According to the latest data released by the Conference Board in May, the Leading Economic Index (LEI) for the United States fell sharply by 1.0% in April 2025, dropping to 99.4 points, marking the largest monthly decline since March 2023. The data for March was also revised down from the original -0.7% to -0.8%. The data shows that over the six months leading up to April 2025, the LEI has cumulatively declined by 2.0%, remaining flat compared to the previous period (April to October 2024), indicating a continued downward trend. Justyna Zabinska-La Monica, Senior Manager of Business Cycle Indicators at the Conference Board, noted, "This month's decline in the LEI is the most severe since March 2023, when there were widespread concerns that the economy would fall into recession, although this ultimately did not materialize. Most of the indicator components have deteriorated, particularly consumer business expectations, which have weakened for several months since January 2025. At the same time, the number of building permits and the average hours worked in manufacturing also negatively impacted the index for the first time in April." She added that the components of the LEI have shown widespread weakness over the past six months, signaling caution for economic growth. However, despite the further expansion of the cumulative decline over six months, it has not yet fallen to the critical level that would trigger a recession signal. According to the Conference Board's latest forecast, the growth rate of the U.S. real GDP is expected to slow to 1.6% in 2025, down from 2.8% in 2024. The impact of tariffs is expected to deliver a major blow to the economy in the third quarter. Meanwhile, the Coincident Economic Index (CEI), which reflects the current economic situation, rose slightly by 0.1% in April to 114.8 points, continuing a moderate upward trend after a 0.3% increase in March. This index has cumulatively grown by 1.1% from October 2024 to April 2025, slightly higher than the previous six months' growth of 0.9%. The four main components of the CEI include: non-farm payroll employment, personal income excluding transfer payments, manufacturing and trade sales, and industrial production. Among these, industrial production remained basically flat in April, making it the weakest component contributing to the index. Additionally, the Lagging Economic Index (LAG) grew by 0.3% in April to 119.3 points, reversing the 0.1% decline in March. Over the past six months (from October 2024 to April 2025), the LAG has cumulatively increased by 0.8%, reversing the previous decline of 0.8% from the earlier period (April to October 2024), reflecting signs of recovery in some lagging economic factors. The three composite indices (LEI, CEI, LAG) compiled by the Conference Board are widely used to assess turning points in the economic cycle. The Leading Economic Index (LEI) consists of ten forward-looking indicators that can predict economic turning points approximately seven months in advance; the Coincident Economic Index (CEI) reflects the current actual economic performance and is usually highly correlated with real GDP; the Lagging Economic Index (LAG) reflects changes that lag behind economic trends and is used to assist in assessing the maturity of the economic cycle