U.S. Leading Indicators Growth Rate Slowed In May; Should You Worry?

June 23, 2018

Is slower acceleration of U.S. growth in leading economic indicators a problem?

 

The U.S. Leading Economic Index (LEI) grew slower in May than in recent months but remained in record territory, according to the latest release of this critical forward-looking indicator.

 

 

Economic growth "is not likely to accelerate," according to Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board, which conducts the research tracking the 10-component indexes in the LEI monthly.

 

The LEI has dropped before all other post-War recessions.

 

 

Slower acceleration in the growth of the economy is feeding skepticism about the durability of the current expansion, which is now in its 108-month and closing on the 120-month post-War record.

 

Recessions often have triggered bear markets, but not every bear market is triggered by recession.

 

The Standard & Poor's 500 climbed on Friday but fell nearly 1% for the week to close at 2754.88, as trade spats escalated and sparked fears of a global slowdown.

 

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market value weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly into an index.​

 

Economic strength remains intact, according to all key fundamental measures and there is certainly no sign of a recession ahead.

 

However, the stock market remains not far from its all-time high and worries about rising trade tensions, political polarization and an unexpected bad event could cause a decline of 10% or 15% in stock prices at any time.

 

 

 

This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

 

This article was written by a professional financial journalist for Private Group Wealth Management, LLC., and is not intended as legal or investment advice.

 

© 2018. All Rights Reserved.

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