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Leading Indicator Edges Up 0.1% in May, Matching Forecasts
The Conference Board's Leading Economic Index rose 0.1% in May, matching estimates. The third straight monthly gain signals recession risk has receded, giving the Fed room to hold rates steady.
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The Conference Board's Leading Economic Index rose 0.1% in May to 99.3, matching the consensus estimate. The prior month's gain was revised up to 0.2% from 0.1%.
The index, which aggregates ten forward-looking components including manufacturing orders, building permits, and stock prices, has now posted three consecutive monthly increases. That marks the longest streak of gains since late 2023.
A sustained rise in the LEI typically signals the economy is expanding in the near term. The Conference Board has said the index's recent trajectory suggests the risk of a recession has receded, though growth remains modest.
Among the components, improvements in consumer expectations and credit conditions offset weakness in new orders for capital goods. The interest rate spread – the gap between short- and long-term yields – remained a positive contributor, reflecting market expectations for Federal Reserve rate cuts later this year.