Leading Economic Index

The Conference Board Leading Economic Index (LEI) is one of the best known composite gauges of where the US business cycle may be headed next. Rather than relying on any single data point, it blends several forward-looking indicators into one headline series meant to flag shifts in economic momentum before those shifts become obvious in lagging data like payrolls, production, or GDP.

As of March 31, 2026, the LEI headline reading is 97.30, versus a 12-month moving average of 98.27. We find generally that the momentum of this indicator illustrates high near-term recession risk.

The Conference Board LEI is designed as a broad, forward-looking business-cycle composite. Instead of asking whether one specific data series is up or down, it asks a more useful question: are several of the economy's leading edges all turning in the same direction at the same time? If the answer is yes, that signal tends to carry more weight than any single series on its own.

What goes into the LEI?

The exact composition can evolve over time, but the index is generally built from a mix of labor, manufacturing, housing, financial market, credit, and expectations data. It tries to capture whether firms are hiring, ordering, financing, and planning for growth, and whether consumers and markets are reinforcing that message or contradicting it. The current components of the LEI are:

• Average weekly worker hours in manufacturing
• Average weekly initial unemployment insurance claims
• New manufacturing orders
• New residential building permits
• S&P 500 stock prices
• Leading Credit Index - a separate index of 6 indicators to gauge credit and liquidity
• Yield spread between 10-year Treasury bonds and federal funds rate.
• Consumer expectations survey data

Timing and revisions

The LEI is published monthly and can be revised as source data changes.

How the signal is usually read

The headline LEI level is not especially meaningful in isolation or across very long time periods. The index has generally risen over time because several of its underlying components, such as stock prices and nominal new orders, tend to grow along with the broader economy. A reading of 100 today is not inherently “better” than a reading of 50 several decades ago. What matters far more is the LEI’s direction: whether it is rising or falling, how persistently that trend has lasted, and how broadly that movement is shared across its components.

CMV evaluates the LEI by measuring its recent momentum. The goal is not to treat any single monthly decline as a recession alarm, but to ask whether leading economic conditions are weakening persistently enough to suggest elevated near-term recession risk.

The CMV LEI momentum model

To create a blunt model of the momentum of the LEI score, we consider two factors: Is the LEI consistently rising/falling? And, has the LEI consistently been above/below its 12-month moving average?

Below is a chart of the LEI value, alongside its own 12-month moving average.

We consider how many consecutive months each has been happening, and assign +/- 0.25 points each for 1-month, 3-month, 6-month, and 12-month checkpoints. For example, if the LEI has fallen consistently for 3 months, that's +0.50 points. If it has also dropped below the 12-month moving average for 1 month, that's +0.25 points.

This methodology generates a score from -2 (12+ consecutive months of increasing and above-trend LEI), to +2 (12 consecutive months of decreasing and below trend LEI). Scores near +2 are weaker and indicate higher near-term recession risk, scores near -2 are stronger and indicate a healthy and growing economy. The current score breakdown is shown below.

Note that this is a simple and blunt model. The point is only to reliably, consistently, and transparently track the momentum of the indicator. Below is how the score has changed over time. Persistently high values (meaning persistent deterioration of the LEI) are well correlated with economic recessions (gray vertical bands).

Some criticisms and shortcomings of the LEI:

Composite averages can hide important differences

The LEI is deliberately broad, which is part of its strength. But that breadth can also hide dispersion. A weakening headline index might be driven mainly by housing and manufacturing while labor data remains resilient, or vice versa.

Revisions and false positives are unavoidable

Leading indicators are useful precisely because they move early, but early-moving indicators are also noisy. The LEI can weaken without a full recession following, and some of its underlying inputs can be revised after the fact. Like any other model, it needs to be interpreted with context and judgement.

The post-2022 decline may be a rare false positive

The most important modern criticism of the LEI is the post-2022 performance. The index rolled over around 2022 and then remained weak for an unusually long stretch, yet the US did not move into an NBER-defined recession. If that ultimately remains true, this would be the only obvious case of a prolonged LEI downturn that failed to coincide with recession.

What does that imply? First, it suggests the LEI should not be read as a mechanical recession switch. In this cycle, several classic leading components such as housing, manufacturing, credit conditions, and the yield curve were clearly signaling restraint, but other parts of the economy proved unusually resilient. The labor market stayed stronger than expected, household and corporate balance sheets entered the tightening cycle in relatively solid shape, and the post-pandemic economy was distorted by reopening effects, supply-chain normalization, labor shortages, and large prior fiscal support. In other words, the LEI may have been correctly identifying a real slowdown impulse, but that impulse was not strong enough to produce a formal recession.

It is a macro model, not a valuation model

The LEI says very little about whether the stock market is cheap or expensive. A softening LEI can coincide with a cheap market that is already discounting bad news, and a strong LEI can coexist with an overheated market that is priced for perfection.

Below are a few useful references for readers who want more detail on the LEI and how leading indicators are generally used.

• The Conference Board - US Leading Indicators - The official home for the LEI release and surrounding commentary.
• The Conference Board - Business Cycle Indicators - Methodology and release background for the broader indicator family.
• FRED Recession Bars Guide - Helpful context for interpreting recession shading on long-history macro charts.
• NBER Business Cycle Dating Committee - The official source for US business-cycle turning point dates.

The table below lists the sources referred to on this page and the sources likely to underpin the final live model.

Item	Source
Conference Board LEI	The Conference Board Official release page for the US Leading Economic Index.
LEI Methodology	The Conference Board Business Cycle Indicators Background on indicator construction, publication, and interpretation.
US Recession Dates	NBER, retrieved through FRED, Federal Reserve Bank of St. Louis Used for recession shading and cycle context.