US business cycle in downturn according to the CEIC Leading Indicator

The CEIC Leading Indicator for the US fell to its lowest level since August 2020, decreasing by 4.8 points to 89.9, according to the flash estimate. This is the sixth consecutive drop of the non-smoothed indicator and the second consecutive month of the performance below 100 which separates expansion from contraction. The smoothed CEIC Leading Indicator fell 3.6 points to 92.6, signalling that the US business cycle has fallen into a downturn phase for the first time since the COVID-19 outbreak in 2020.

June marked another month of declining vehicle sales in the US, as they dropped by 13.1% y/y, the eleventh consecutive double-digit decline. The housing market index fell to 67, the lowest since June 2020 as interest rate hikes are pushing mortgage rates up and home prices increase rapidly. The Conference Board consumer confidence fell to its lowest reading in 16 months, with the expectations index deteriorating sharply, driven by rising inflation, particularly of food and gas prices.

The ISM PMI eased to its lowest reading in two years and has been mostly decelerating since September 2021. According to the ISM, supply chain constraints continue to plague the US manufacturing sector. The number of jobless claims in June was the highest since the beginning of the year, indicating that the tight labour market might be loosening. The Standard & Poors 500 stock market index closed June 2022 at 3785.4, the lowest end month value since January 2021 and down 9.2% m/m. The index lost 21% since the beginning of the year, making H1 2022 the worst first half of the year since 1970.

More data and visuals about the US CEIC Leading Indicator here.

The CEIC Leading Indicator microsite here.

Further data and analysis on the US economy are available on the CEIC US Economy in a Snapshot – Q2 2022 report.