Welcome to Extreme Investor Network, where we provide expert insights on the stock market, trading, and all things Wall Street. Today, we’re diving into the latest economic indicators to help you navigate the current financial landscape.
One key indicator to watch is the Leading Economic Index (LEI), which continued to show weakness in several areas. Factory new orders, impacted by a global manufacturing slowdown, remained low. The inverted yield curve, often a signal of recessionary pressures, persisted. Additionally, a decrease in building permits and lukewarm consumer sentiment added to the drag on the LEI.
While there were a few positive developments in other LEI components, they were not enough to offset the prevailing weakness. Justyna Zabinska-La Monica, Senior Manager at The Conference Board, noted that these indicators align with expectations for moderate economic growth in late 2024 and early 2025.
In contrast, the Coincident Economic Index (CEI) showed modest growth, reflecting the current state of the economy. Key contributors to the CEI’s growth included payroll employment, personal income, and manufacturing and trade sales, offsetting a decline in industrial production.
On the other hand, the Lagging Economic Index (LAG) declined in September, signaling a loss of momentum in the economy. The persistent decline in the LEI, particularly in critical areas like new orders and the yield curve, suggests that economic growth is decelerating.
Looking ahead, the overall economic outlook points to slower growth and increased recession risks. The consistent decline in the LEI and softening in the Lagging Index suggest a bearish forecast for the near-term economy. While the Coincident Index remains relatively stable for now, caution is advised for investors and businesses as we head into 2025.
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