August LEI: Light at the end of tunnel?
|Summary
For now, the best that can be said about the Leading Economic Index is that the declines are getting smaller, but positive developments with interest rates point to some potential relief from rate-sensitive parts of the economy that have been weighing on this barometer.
Long as I can see the light
The Leading Economic Index (LEI) declined again by -0.2% to 100.2 in August, making for a 30th consecutive month without an increase (chart). The index breached its pandemic low last month, and the last time the LEI registered an increase was February 2022. On a monthly basis, the LEI has averaged declines of 0.36% year-to-date in 2024. This is a material improvement from the monthly average declines of 0.61% in 2023 and 0.55% in 2022. Declines in the LEI have been becoming more modest for some months now.
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