Leading Economic Indicators Continue Downward Trend, but Recession Not Certain

The economy—the hottest topic as of late with all eyes on the Federal Reserve, coupled with the flip-flopping of tariffs and their potential impacts—continues to see decline in March, according to the latest data from The Conference Board.

The March Leading Economic Index® (a predictive tool of economic conditions) slipped 0.7% to 100.5, following February’s 0.2% decline (upwardly revised from 0.3%). The index is down 1.2% in the six-month period ending in March 2025, a slight deterioration from 1% in the six months preceding February’s data.

Justyna Zabinska-La Monica—senior manager of Business Cycle Indicators at The Conference Board—commented that this month’s data points to “slowing economic activity ahead.”

“March’s decline was concentrated among three components that weakened amid soaring economic uncertainty ahead of pending tariff announcements: 1) consumer expectations dropped further, 2) stock prices recorded their largest monthly decline since September 2022, and 3) new orders in manufacturing softened,” she explained.

Recent consumer sentiment data definitely supports the idea of economic decline, with April’s preliminary data seeing the fourth straight month of decreases, now down 30% since December 2024.

On the other hand, the Coincident Economic Index® (reflecting current economic conditions) slightly increased by 0.1% to 114.4, which follows a 0.3% increase in February. The index has risen by 0.8% over the six-month period between September 2024-March 2025, up slightly from the 0.7% growth seen over the previous six months.

Zabinska-La Monica clarified that March’s data “does not suggest that a recession has begun or is about to start.”

“Still, the Conference Board downwardly revised our US GDP growth forecast for 2025 to 1.6%, which is somewhat below the economy’s potential,” she concluded. “The slower projected growth rate reflects the impact of deepening trade wars, which may result in higher inflation, supply chain disruptions, less investing and spending, and a weaker labor market.”