The Conference Board Leading Economic Index® (LEI) increased by 0.3% in November 2024, following a 0.4% decline in October. During the six-month period from May to November, the LEI contracted by 1.6%, an improvement from the 1.9% decline during the prior six-month period. The “rise in LEI is a positive sign for future economic activity in the US. The Conference Board currently forecasts US GDP to expand by 2.7% in 2024, but growth to slow to 2.0% in 2025” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.
Real GDP growth projections for the fourth quarter of 2024 continue to look good with the Atlanta Fed’s GDPNow model estimating 3.1% real GDP growth, while the New York Fed’s Nowcast predicts 1.9% GDP growth.
Source: The Conference Board
Source: The Conference Board
The Coincident Economic Index® (CEI), which gauges present economic conditions, increased by 0.1% in November, following a 0.1% increase in October. During the six month period from May through November 2024, the CEI rose 0.6%, a bit higher than the 0.5% growth rate observed in the previous six months. Three of the four CEI components rose in November.
The Federal Open Market Committee (FOMC) voted to lower the federal funds target rate 25 basis points to the 4.25% to 4.5% target range at the December meeting. The Fed has lowered the federal funds rate 100 basis points, or 1%, since the initial rate cut on September 18th. In the post meeting statement, FOMC members noted “that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.”
The December FOMC meeting included an updated Summary of Economic Projections. The central tendency omits the three highest and three lowest forecasts. Compared with the September projections, FOMC members slightly raised their headline and core PCE inflation forecasts for 2025. Members also raised their December 2025 fed funds rate projection by 50 basis points.
Following the December FOMC meeting, Fed Chair Powell hosted a media conference. Click to read a transcript or to watch a recording of the event.
The next FOMC meeting is scheduled for January 28th and 29th.
Our January Model Portfolio Update is scheduled to be published in early January. Our December update is available here and our latest Rates Update is available here.
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