U.S. Leading Indicators Point to Economic Slowdown in 2026

By Ed Frankl

The U.S. economy is expected to slow in 2026 amid a downturn in optimism among households and businesses, according to a basket of monthly economic indicators.

The Leading Economic Index, or LEI, published Tuesday by research group The Conference Board, fell 0.3% to 98.3 in September, after a similar 0.3% decrease in August.

"Weakening expectations from consumers and businesses led the overall contraction in the index," said Justyna Zabinska-La Monica, senior manager for business-cycle indicators at The Conference Board.

Also contributing to the downtick were weaker manufacturers' new orders of consumer goods and materials and initial claims for unemployment insurance, the Conference Board's report said. By contrast, stock prices contributed positively to the index.

The LEI is meant as a predictive index. It is based on 10 components, among them manufacturers' new orders, building permits for new private housing units, stock prices and consumer expectations, and aims to signal shifts in the business cycle.

Economic activity is set to weaken after strong midyear consumer spending and disruptions in the fourth quarter as the federal-government shutdown set in, Zabinska-La Monica added. The Conference Board expects gross domestic product to rise by 1.8% in 2025, before slowing to 1.5% in 2026.

"Overall, growth remains fragile and uneven as businesses adjust to tariff changes and softer consumer momentum," she continued.

The LEI fell by 2.1% in the six months between March and September, a faster rate of decline than its 1.3% dip over the previous six-month period, the report said.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

December 09, 2025 10:49 ET (15:49 GMT)