{"id":167368,"date":"2025-09-19T10:01:16","date_gmt":"2025-09-19T10:01:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/167368\/"},"modified":"2025-09-19T10:01:16","modified_gmt":"2025-09-19T10:01:16","slug":"recession-signal-triggered-by-leading-economic-index","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/167368\/","title":{"rendered":"Recession Signal Triggered by Leading Economic Index"},"content":{"rendered":"

The Conference Board\u2019s (TCB) Leading Economic Index<\/a> (LEI), which signals potential inflection points in the economy and where growth is headed in the near term, has triggered a recession<\/a> signal as the index continues to fall.<\/p>\n

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In August, the LEI fell by 0.5%, the largest monthly decline since April. The LEI factors in several financial and non-financial components, such as the interest rate spread, initial jobless claims, building permit volume, and credit data.<\/p>\n

LEI Decline Signals Recession Risk <\/p>\n

Through the six months ended August, the LEI has now declined by 2.8%, triggering a\u00a0recession\u00a0signal in the process. The signal is triggered when the LEI\u2019s annualized six-month growth rate drops below 4.1% and when the six-month diffusion index reaches or drops below 50. The diffusion index tracks the extent of decline within the LEI\u2019s components.<\/p>\n

\u201cA major driver of this slowdown has been higher tariffs, which already trimmed growth in H1 2025 and will continue to be a drag on GDP growth in the second half of this year and in H1 2026,\u201d said TCB Senior Manager, Business Cycle Indicators Justyna Zabinska-La Monica.<\/p>\n

At the same time, TCB isn\u2019t calling for a recession just yet, as the LEI has flashed false recession signals in the past. However, the organization expects 2025 gross domestic product<\/a> (GDP) growth of 1.6%, down from 2.8% in 2024.<\/p>\n

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