US recession alert: The Conference Board Leading Economic Index (LEI) has fallen ~5% annualized over 6 months, triggering a RECESSION signal. It’s now down ~16% from its peak and hit a 9-year low. In the past, such drops have preceded every US recession since 1960. https://x.com/GlobalMktObserv/status/1937126745133478289
This is a flashing red signal for anyone still arguing the “soft landing” narrative. The Conference Board’s Leading Economic Index (LEI) has now contracted more than 5% annualized over the past 6 months, officially triggering a recession signal as of May 2025.
Historically, every instance of a drop this steep, without exception since 1960 has preceded a U.S. recession. The pattern is brutal in its consistency.
What’s most concerning here isn’t just the signal itself, but the context in which it arrives: the 6-month growth rate in the LEI is down 16% from its peak and has reached a 9-year low, echoing the collapses that preceded the dot-com bust, the Great Financial Crisis, and the COVID shock.
Unlike lagging indicators like unemployment or inflation, the LEI is built to anticipate what’s coming. It pulls together manufacturing new orders, credit conditions, equity prices, consumer expectations, and more. When this index flashes red, it’s telling you the economy’s forward engine is stalling.
Here’s the nuance that matters: we’re not in a garden-variety cycle. The Fed is holding rates near post-Volcker-era highs, fiscal deficits are still blowing out, and credit markets especially in small business lending and autos are tightening. Layer on geopolitical volatility, energy shocks, and the exhaustion of pandemic savings, and you get a recipe not just for recession, but for a structurally painful one.
The type of downturn where monetary easing may arrive too late or carry diminished marginal effect. Market participants still hoping for a V-shaped bounce may want to revisit this chart. Because what it shows, plainly and historically, is that when the LEI drops this hard, recession isn’t some tail risk, it’s the base case. https://x.com/onechancefreedm/status/1937319065431027996
...the markets want to imagine that the US economy is so robust that it could withstand
1. all the uncertainties and businesses (especially smaller ones) dealt blows from Trump's tariffs
2. all the public sector unemployment and contract terminations from DOGE cuts
3. all the private sector unemployment from AI productivity cuts
4. all the adversities from geopolitical fallout
5. prolonged period that the Fed kept interest rates higher for longer
6. higher wages and lower domestic demand from immigration cuts and deportations
7. a plunge in inbound tourism adversely impacting the hospitality sector
8. weak consumer sentiment and confidence amidst increasing loan delinquencies
9. persistent sticky long term US yields/rates keeping mortgage rates high
