Recession Bells Ring Louder as Conference Board’s LEI Sinks

The U.S. economy’s “early-warning siren” just grew louder. The Conference Board reported Monday that its Leading Economic Index (LEI) fell 0.3 percent in June to 98.8—a level not seen since 2020. The decline extends the LEI’s losing streak to 18 of the last 19 months and pushes its six-month drop to 2.8 percent. With the Board’s own recession model now flashing red for a third straight month, investors are again weighing whether a downturn lurks just over the horizon—and many are parking cash in gold, which traded as high as $3,401 an ounce during the session.

Digging into the details, June’s stock-market pop was the only bright spot for the LEI. It was swamped by soft new-orders data, sagging consumer expectations, and a third consecutive rise in initial jobless claims. Because the LEI typically leads turning points in the broader economy by about seven months, a late-2025 slump is exactly what the model suggests. The ten-component gauge captures everything from building permits to the 10-year Treasury minus fed-funds rate spread—variables that free-market economists have long valued as better barometers than headline GDP.

Oddly, the Conference Board still predicts full-year real GDP growth of 1.6 percent, down sharply from 2024 but hardly recessionary. That optimism rests on strength reflected in the Coincident Economic Index (CEI), which mirrors current conditions; it rose 0.3 percent in June, with all four components—payrolls, personal income excluding transfers, manufacturing and trade sales, and industrial production—posting gains. Yet even the CEI’s year-to-date rise has slowed to 0.8 percent, and the Lagging Economic Index (LAG) is flat month-over-month. History shows that coincident and lagging gauges often remain rosy right up until the moment the cycle turns.