US Leading Economic Index Falls 0.2% in June, Reversing Two-Month Gains

The US Leading Economic Index (LEI) fell 0.2% in June to 99.1, reversing two months of gains, according to the Conference Board on local time July 20. The decline was attributed to weakened consumer expectations and reduced building permits across most categories, though financial components including the yield curve spread contributed positively. The June drop followed a 0.1% rise in May and marked a partial reversal of the prior two-month upward trend.

LEI Components Show Mixed Signals in June

The Conference Board reported that the June LEI reading of 99.1 missed Yonhap Infomax's market consensus of a 0.1% decline. For the first half of the year, the index declined 0.3% year-over-year, an improvement from the 1.1% drop recorded in the second half of the previous year. Financial components, including the term spread between long- and short-term interest rates, contributed positively to the index but did not lead the overall movement. The Conference Board identified weakened consumer expectations and falling building permits across most categories as the primary factors dragging down the index. The six-month and 12-month growth rates remained negative but stable, with the six-month diffusion index standing at 55.0 in June.

Conference Board Raises 2026 GDP Forecast to 1.9%

The Conference Board revised its 2026 annual GDP growth forecast upward from 1.8% to 1.9%, citing strong and sustained business investment related to artificial intelligence. The organization stated that AI-driven corporate investment is expected to support economic activity throughout the year.

Coincident and Lagging Indexes Stabilize

The Coincident Economic Index (CEI) rose 0.2% in June to 114.6, with all components—employment, personal income, manufacturing and trade sales, and industrial production—contributing positively. The CEI increased 0.4% during the first half of 2026, slightly higher than the 0.3% gain in the prior six months. The Lagging Index (LAG) remained flat at 120.5 in June, showing no change from May's 0.1% decline. The LAG rose 1.1% in the first half of the year.

FAQ

What caused the US Leading Economic Index to fall in June? The Conference Board attributed the 0.2% decline to weakened consumer expectations and reduced building permits across most categories, though financial components including the yield curve spread contributed positively.

How did the June LEI compare to market expectations? The June LEI reading of 99.1 represented a 0.2% decline, missing Yonhap Infomax's market consensus of a 0.1% decline.

Why did the Conference Board raise its 2026 GDP forecast? The Conference Board revised its 2026 annual GDP growth forecast upward from 1.8% to 1.9%, citing strong and sustained business investment related to artificial intelligence.