Changes to LEI Outlook Demonstrate Worrying Signs for U.S. Economy

Recent updates to the Leading Economic Index (LEI), an economic indicator by the reputable Conference Board, highlights worrying trend in the American economy.

The global headquarters of the Conference Board in New York City, United States of America.

The Conference Board is one of the most well-known economic analysts in modern American history, having been the author of the frequent U.S. Consumer Confidence Index, as well as many other notable pieces of data like the U.S. Job Satisfaction Survey and CEO Confidence Survey.

On May 19th, the Conference Board reduced its estimate for the LEI by 1% for the 6th consecutive month to around 99.4; composing of rigorous research by analysts from the non-profit organization, the data solidifies a long-term trend in the economy regarding poorer-than-average output, which is only getting worse after each monthly report. Generally, this trend has contributed to a steep decline in the LEI, which has served as an accurate indicator for the health of the economy since its conception. Justyna Zabinska-La Monica, the Senior Manager for Business Cycle Indicators at the 501(c)(3) non-profit organization, stated in a statement after the decision by his organization, "Consumers' expectations have become continuously more pessimistic each month since January 2025," reflecting on how poorer economic trends have correlated to how American consumers are feeling, as well.

Zabinska-La Monica added, "The U.S. LEI registered its largest monthly decline since March 2023, when many feared the US was headed into recession, which did not ultimately materialize... Most components of the index deteriorated. Notably, consumers' expectations have become continuously more pessimistic each month since January 2025, while the contribution of building permits and average working hours in manufacturing turned negative in April. Widespread weaknesses were also present when looking at six-month trends among the LEI's components, resulting in a warning signal for growth."

Many economists have put all blame on President Donald Trump's "Liberation Day" slate of both "reciprocal" tariffs but also diplomatic tariffs as the culprit for this massive decline in both consumer confidence and in the quantitative state of the economy. These tariffs not only put strain on American consumers due to higher inflation, but also contributed to American companies being virtually obligated to pursue layoffs and cut wages in an effort to minimize expenses at a time when products are getting more expensive; this way, the American consumer is bearing the brunt of two things: higher costs, and lower income. As Mark Williams, a leading finance professor at Boston University put it referring to his home state of Massachusetts, "I call it a wrecking ball... it is a gigantic wrecking ball that’s hit Massachusetts." In so many more areas of the country, top economists and other investment analysts have raised concern over Trump's "shock therapy" of the economy due to his immediate raising of tariffs to some of the highest levels ever in recent American history, putting an immediate strain on parts of the economy that cannot adapt quickly enough.

Fed Chair Powell, Sec. of Treasury Bessent, and other members of the Trump administration have responded to these signs by assuring stability as they continue to grapple through economic turbulence.