Leading US Economic Indicator Continues to Decline in March, Predicts ‘Slowing Economic Activity Ahead’

The data does not indicate that the United States is in a recession, an analyst says.

People walk past small businesses in Doylestown, Pa., on Nov. 4, 2021. Matt Rourke/AP Photo

The Conference Board Leading Economic Index (LEI) fell by 0.7 percent in March to 100.5, continuing the declining trend seen in February, the think tank said in an April 21 statement.

LEI offers an early indication of where the economy is headed over the coming months.

Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board, said the March decline “pointed to slowing economic activity ahead.”

For the six-month period ending in March, LEI contracted by 1.2 percent, which was a smaller decline compared to the 2.3 percent fall in the previous six months.

Three of the index’s components registered sizable declines last month—new orders in manufacturing, stock prices, which saw the biggest monthly fall since September 2022, and consumer expectations.

The decline in these components came amid “soaring economic uncertainty ahead of pending tariff announcements.”

The think tank revised down its GDP estimate for the United States this year to 1.6 percent, which is “somewhat below the economy’s potential,” Zabinska-LaMonica said, adding that data does not suggest the country to either be in a recession or soon face such a situation.

“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.”

Treasury Secretary Scott Bessent, in an interview with Tucker Carlson earlier this month, said tariffs most likely won’t hit as hard on consumers as some analysts suggested.

For every 10 percent in new tariffs on foreign goods, American consumers could see a one-time price increase of only 2 percent or even lower, he said, citing a study showing that the roughly 20 percent tariffs imposed on China during the first Trump term only led to a price increase of 0.7 percent.

“If we could put on a 20 percent tariff and have the foreigners pay that, and use that money to bring down our government deficit and keep taxes low here, that’s a very unique formula that hasn’t been tried in this country for a long time,” Bessent said.

Meanwhile, in March, the U.S. economy generated 228,000 new jobs, up from a downwardly adjusted 117,000 positions in February.

Following the release of the jobs report, the White House said on April 4 that this was the fourth highest month for private payroll growth over the last two years and that the private sector is “roaring back” under the new Trump administration.

Tom Ozimek contributed to the report.