Not-for-profit research firm The Conference Board released its November reading of leading economic indicators (LEI) today, with that index dropping a full percentage point as forward-looking data continues to indicate pain for the broader economy. 

Now down 3.7% over the last six months, the LEI index only saw positive contributions from one metric this month: stock prices. All other big data points—housing, manufacturing and labor—point in a negative direction. 

“Despite the current resilience of the labor market…and consumer confidence improving in December, the U.S. LEI suggests the Federal Reserve’s monetary tightening cycle is curtailing aspects of economic activity, especially housing,” said Conference Board Senior Director of Economics Ataman Ozyildirim in a statement.

Meant to predict variables or “turning points” in the business cycle about seven months into the future, the LEI fell about 5% in the year or so before the Great Recession. 

The LEI index peaked in February of this year but has fallen swiftly since then as interest rates, inflation and other disruptions have pushed the economy toward negative growth. Some leading real estate economists have said the current housing market is already in a recession of its own.

At the same time, the National Association of REALTORS® is predicting a relatively flat housing market in 2023, looking nothing like the crash that accompanied the Great Recession 15 years ago.

Ozyildirim called the data in the LEI indicative of “serious headwinds to economic growth.”

“As a result, we project a U.S. recession is likely to start around the beginning of 2023 and last through mid-year,” he said.

Jesse Williams is a senior editor for RISMedia.

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