For Release 9:30 AM ET, August 12, 2024
Using the Composite Indexes: The Leading Economic Index (LEI) provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The Coincident Economic Index (CEI) provides an indication of the current state of the economy. Additional details are below.
The Conference Board Leading Economic Index®(LEI) for the Euro Area fell by 0.7 percent in July 2024 to 96.7 (2016=100), following a similar 0.7 percent drop in June. The LEI contracted by 3.6 percent over the six-month period from January to July 2024, a lower rate of decline than the 5.0 percent contraction over the previous six-month period.
The Conference Board Coincident Economic Index® (CEI) for the Euro Area inched up by 0.1 percent in July 2024 to 108.7 (2016=100), the same growth rate as in June. The CEI grew by 0.5 percent over the six-month period from January to July 2024, slightly up from the 0.2 percent growth over the previous six-month period.
“The LEI for the Euro Area fell again in July, continuing the downward trend that began in March 2022,” said Ian Hu, Economic Research Associate, at The Conference Board. “All components, but the systemic stress indicator, contributed negatively to the LEI in July. The negative yield spread, weak orders indicators, and depressed consumer expectations weighed on the leading index in each of the past sixteen months. Consequently, the trajectory of the Index semiannual and annual changes remained strongly negative and recession risks elevated. However, further monetary easing by the ECB in September and December is expected to help curb growth headwinds going forward. Overall, The Conference Board projects annual real GDP growth for the Euro Area at around 0.8 percent in 2024.”
The next release is scheduled for Thursday, September 12, 2024, at 9:30 A.M. ET.
NOTE: The chart illustrates the so-called 3Ds—duration, depth, and diffusion—for interpreting a downward movement in the LEI. Duration refers to how long the decline has lasted. Depth denotes the size of decline. Duration and depth are measured by the rate of change of the index over the most recent six months. Diffusion is a measure of how widespread the decline is among the LEI’s component indicators—on a scale of 0 to 100, a six-month diffusion index reading below 50 indicates most components are weakening. The 3Ds rule signals an impending recession when: 1) the six-month diffusion index lies below 50, shown by the black warning signal lines in the chart; and 2) the LEI’s six-month rate of decline falls below the threshold of −6.9 percent. The red recession signal lines indicate months when both criteria are met simultaneously—and thus that a recession is likely imminent or underway.
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About The Conference Board Leading Economic Index® (LEI) and Coincident Economic Index® (CEI) for the Euro Area
The composite economic indexes are key elements in an analytic system designed to signal peaks and troughs in the business cycle. Comprised of multiple independent indicators, the indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component.
The CEI reflects current economic conditions and is highly correlated with real GDP. The LEI is a predictive tool that anticipates—or “leads”—turning points in the business cycle by around two months.
The eight components of Leading Economic Index® for the Euro Area are:
The four components of the Coincident Economic Index® for the Euro Area are:
To access data, please visit: https://data-central.conference-board.org/
About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org
With graph and summary table
August 12, 2024
PRESS RELEASE
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August 14, 2024
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LEI for Germany Dipped Again in June
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PRESS RELEASE
LEI for the Euro Area Further Declined in July
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PRESS RELEASE
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August 12, 2024
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LEI for South Korea Increased in June
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All release times displayed are Eastern Time
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