The Conference Board's US leading indicator index fell by 0.3 percent in February, continuing its downward slide following January's 0.2 percent (previously -0.3 percent) drop, and compared to expectations for a 0.2 percent decline in the Econoday consensus forecast. Over the six-month period between August 2024 and February, the LEI dropped 1 percent, a smaller decline than the 2.1 percent decrease over the six-month period between February and August 2024.

The Conference Board said a more pessimistic consumer outlook for business conditions weighed most heavily on the index, while manufacturing new orders were the second largest drag on the LEI.

[G]iven substantial policy uncertainty and the notable pullback in consumer sentiment and spending since the beginning of the year, we currently forecast that real GDP growth in the US will slow to around 2.0% in 2025, it predicted.

Still, the LEI's six-month and annual growth rates, while still negative, have remained on an upward trend since the end of 2023, suggesting that headwinds in the economy as of February may have moderated compared to last year, the report said.

The Conference Board US Coincident Economic Index was up 0.3 percent in February, following a 0.2 percent increase in January. Overall, the CEI is up 1.2 percent in the six-month period ending in February, higher than its 0.6 percent growth rate over the previous six-month period. The CEI's componentspayroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial productionare included in the data used to determine recessions in the United States. They all improved in February, with the largest positive contribution coming from industrial production, followed by personal income less transfer payments, manufacturing and trade sales, and payroll employment, the report said.

The Conference Board US Lagging Economic Index rose 0.4 percent in February, following a 0.3 percent increase in January. The LAG's six-month growth rate increased by 0.2 percent over the six-month period ending in February, reversing the 0.2 percent drop for the prior six months.

Another sluggish showing expected at minus 0.2 percent.

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.