More Signs of A Mid-Cycle Slowdown

The latest batch of economic indicators are in line with our mild recession outlook (a.k.a., a mid-cycle slowdown). We now have June's Leading and Coincident Economic Indexes (LEI & CEI) and July's NY and Philly regional business surveys, which are conducted by five of the 12 Federal Reserve district banks. The averages of the five tend to closely track the national manufacturing purchasing managers survey. Consider the following:

(1) The LEI dropped 0.8% in June, the steepest slide since April 2020 during the height of the pandemic. It is down four months in a row.  On the other hand, the CEI edged up 0.2% to a new record high.