Leading Economic Index Increases Again in August Upward Trajectory Not Consistent With Recession
The Conference Board reported on Thursday that its Leading Economic Index (LEI) increased in August for the fourth consecutive month to its highest-ever level of 116.4 (see chart). Starting in April 2009, the LEI has increased every month except for April of this year, for a record of 28 increases over the last 29 months. As the graph above shows, the last six recessions have been preceded by sharp declines in the LEI, and we're not seeing any declines in the LEI that would predict a pending recession.
As Scott Grannis commented on the Calafia Beach Pundit Blog:
"The Index of Leading Indicators continues to rise, up 6.5% over the past year. Every recession for the past 50 years has been preceded by a significant decline in the growth rate of this index; that is not the case today. To be sure, this index is not always a good leading indicator, but it is not even close to signaling impending doom or even a modest recession."