The Conference Board's US leading indicator index declined by 0.4 percent in October, following a revised 0.3 percent drop (previously -0.5 percent) in September, and more than the 0.3 percent decline expected in the Econoday consensus forecast. Over the six-month period between April and October 2024, the LEI dropped 2.2 percent, a larger decline than the 2 percent drop over the six-month period between October 2023 and April 2024.

The Conference Board blamed weak new factory new orders,"which remained weak in 11 out of 14 industries." It noted that manufacturing hours fell by the largest margin since December 2023, while jobless claims rose and building permits declined partly due to hurricanes last month.

"Apart from possible temporary impacts of hurricanes, the US LEI continued to suggest challenges to economic activity ahead," it warned.

The Conference Board US Coincident Economic Index was unchanged in October, same as in September. Overall, the CEI is up 0.8 percent in the six-month period ending in October, higher than its 0.5 percent growth rate over the previous six-month period. The CEI's components-payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production-are included in the data used to determine recessions in the United States."Personal income less transfer payments and manufacturing and trade sales, which are estimates for October, contributed positively but were offset by the second consecutive decline in industrial production. Payroll employment was virtually unchanged," the report said.

The Conference Board US Lagging Economic Index fell 0.1 percent in October, following a 0.3 percent drop in September. The LAG's six-month growth rate contracted by 0.8 percent over the six-month period ending in October, after a 1.2% increase for the six-month period from October 2023 to April 2024.

Another decline is the call for leading indicators, down 0.3 percent after a decline of 0.5 percent in September.

The index of leading economic indicators is a composite of 10 forward-looking components including building permits, new factory orders, and unemployment claims. The report attempts to predict general economic conditions six months out.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the index of leading indicators, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly -- and causing potential inflationary pressures. The index of leading indicators is designed to predict turning points in the economy -- such as recessions and recoveries. More specifically, it was designed to lead the index of coincident indicators, also now published by The Conference Board. Investors like to see composite indexes because they tell an easy story, although they are not always as useful as they promise. The majority of the components of the leading indicators have been reported earlier in the month so that the composite index doesn't necessarily reveal new information about the economy. Bond investors tend to be less interested in this index than equity investors. Also, the non-financial media tends to give this index more press than it deserves.