Key U.S. economic outlook indicates worry for the economy

The decline of the Conference Board's Leading Economic Index (LEI) represents a very worrying trend for the economy ahead of the maintenance of high tariff rates into the early summer.

The logo of the Conference Board.

The Leading Economic Index has been a very reliable source of economic trends in the United States due to its advanced degree of consulting from top economic analysts across the nation. The Conference Board is a NYC-based nonprofit organization specializing in business research as an independent think tank.

The Leading Economic Index is supported by the U.S. Department of Commerce, which was the first to set it up as an economic indicator. It times economic booms and recessions in a dozen other countries like the United Kingdom and the European Union.

The Conference Board's LEI, The Conference Board.

In the month of May, continuing the trend from previous months, the index declined by 0.1%. This is, fortunately, much better than the 1.4% drop which it estimated for the month of April. Yet, May's decline exacerbated the 2.7% general receding of the index over the past six months, with each month reporting similarly negative results.

Many investors in recent weeks began to ease their worries about the global economy. As key trade deals with the United Kingdom and other trade partners were realized, they bought back into the stock market after retreating their capital early into Trump's first 100 days.

However, this does not mean that the United States is safe from future economic peril. The U.S.-China trade talks, which are by far the most consequential, have yet to produce a significant deal to reduce both the initial American tariff as well as the retaliatory Chinese tariff simultaneously.

Also, the Federal Reserve's recent decision to hold rates reflects a consensus by top economic officials that the U.S. is not ready to cut rates. It cited concerns over the potential inflationary outcome of tariffs. But some Fed officials like Governor Waller called for rate cuts as early as July.

On June 24th, Fed chair Jerome Powell refused to support a July rate cut.

May's LEI results further emphasize this lasting concern for the economy. With the environment being far too volatile, with a Middle Eastern proxy war fueling the fire even further, it is not safe to call it quits in staying alert for inflation.