Leading Economic Indications, Recession 2024, and the S&P 500 (Full Size)

The Conference Board Leading Economic Index® has an excellent track record of predicting recessions. Currently the index is predicting a recession in 2024 and only one of the ten components of the index, the S&P 500, is expanding. Normally, since the S&P 500 is a leading economic indicator, the index cannot be used to time the stock market. Currently either economic conditions in the USA must improve, or more likely, the S&P 500 must drop in 2024 to make the index members consistent.
The ten components of The Conference Board Leading Economic Index® for the U.S. include: Average weekly hours in manufacturing; Average weekly initial claims for unemployment insurance; Manufacturers’ new orders for consumer goods and materials; ISM® Index of New Orders; Manufacturers’ new orders for nondefense capital goods excluding aircraft orders; Building permits for new private housing units; S&P 500® Index of Stock Prices; Leading Credit Index™; Interest rate spread (10-year Treasury bonds less federal funds rate); Average consumer expectations for business conditions.

[@deseosuho]

The S&P was NOT a leading indicator in 08-09. That recession is now officially dated to start December 07, right around all time highs. In the last 20 years, at least, the stock market has been a coincident indicator with employment, which lags behind new orders and profits.

[@KirbyCundiff]

Good point. The S&Ps peak was in October 2007 and the LEI was already forecasting a recession by then.