The Conference Board’s Leading Economic Index (LEI) declined for the sixth consecutive month in May, slipping 0.1% to reach 99.0 (2016 = 100)—following an even steeper and revised 1.4% drop in April, the largest monthly contraction since early 2020. Over the past six months, the LEI has fallen 2.7%, a rate of decline significant enough to trigger the board’s “recession signal” .
According to Justyna Zabinska‑La Monica, Senior Manager of Business Cycle Indicators at The Conference Board, May’s modest decline was largely offset by a rebound in stock prices. Still, concerns such as weak manufacturing orders, dips in building permits, increases in unemployment claims, and continued consumer pessimism weighed on the index. Long-term indicators show a diffusion score that reflects deterioration across most of the LEI’s components.
While the Conference Board doesn’t currently forecast a recession, it expects that GDP growth will slow notably in 2025 compared to 2024—projecting around 1.6% growth this year, with trade uncertainties possibly dragging growth further into 2026.
The board’s coincident economic index (CEI), which tracks current economic conditions, rose 0.1% to 115.1 in May, suggesting modest resilience in the economy. Its gain over six months outpaced previous performance, though industrial production remains sluggish.
A broader perspective from third-party observers echoes caution. Newsweek notes that while the LEI’s decline has moderated, it remains perilously close to recessionary thresholds. Consumer confidence, which briefly rebounded in May following tariff relief, dipped again in June—raising further concerns about economic sentiment.
For businesses and policymakers, these results offer a complicated signal. On one side, the pullback in leading indicators implies a significant slowdown is likely underway—or may be close. On the other, current activity indicators suggest growth is continuing, albeit modestly. The Federal Reserve may construe this as a justification to maintain current interest rates to balance slowing growth against persistent inflation and trade volatility.
Going forward, monitoring shifts in manufacturing orders, housing permits, consumer sentiment, and employment claims will be critical. If these factors continue to deteriorate, concerns about a recession could move from theoretical risk to likely scenario in late 2025.
