US Leading Indicators Signal Firmer Growth Momentum

US leading indicators rose in July, pointing to stabilising growth momentum despite persistent weakness in consumer spending and labour-market conditions.

US Growth Momentum Improves

U.S. leading economic indicators improved in July, pointing to firmer near-term growth momentum and easing concerns over a significant slowdown in the world’s largest economy.

The Conference Board Leading Economic Index (LEI) rose 0.2% month-on-month to 99.5 in July, following a revised 0.1% decline in June. The reading exceeded the market consensus forecast of a 0.1% increase.

More significantly, the LEI’s six-month growth rate turned positive at 0.2%, compared with a 1.3% contraction in the previous six-month period. This marked its first positive reading in around four years, suggesting downside risks to the U.S. growth outlook have eased.

The improvement was relatively broad-based, with most LEI components strengthening during the month. Financial-market and business-related indicators provided support, while consumer expectations remained a drag.

The divergence reflects an increasingly uneven U.S. economic recovery. Business investment, particularly spending linked to artificial intelligence, continues to support activity, while elevated living costs and softer labour-market conditions are weighing on household spending.

The Conference Board expects U.S. real GDP to expand by 1.9% in both 2026 and 2027.

Overall, the latest LEI data suggest the U.S. economy remains on an expansionary path, with growth momentum stabilising and potentially improving modestly. However, weaker consumer demand and labour-market momentum are likely to limit a stronger acceleration.

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