Leading U.S. index falls again but economy keeps on growing

The US Conference Board Leading Economic Index (LEI) dropped to 99.5 in Oct-24 (Sep-24: 100.2), marking the 8th consecutive monthly decline, indicating early warning signs of a possible economic downturn. Over the six months from Apr-24 to Oct-24, the LEI recorded a cumulative decrease of -2.2% (Oct-23 to Apr-24: -2.0%).

The persistent decline in the LEI was primarily attributed to the ongoing weakness in the US manufacturing sector led by a fall in new orders, reflecting broader concerns over the US industrial demand. Concurrently, the Coincident Economic Index remained unchanged at 112.8 as the positive impacts from improved income were offset by a contraction in industrial production, suggesting that the current economic activity remained stable.

Despite recording the 7th contraction in the LEI in 2024, the US economy has shown resilience and continued to grow over the year, as suggested by other economic indicators. Overall, we expect the US economy will continue to expand steadily, supported by policy easing, favourable economic environment and resilience in the job market. Nevertheless, we remain cautious of possible weakness in economic activities because the still restrictive interest rates could constrain demand.

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