Leading To A Recession?

First the good news: The Index of Coincident Economic Indicators (CEI) rose 2.2% y/y to yet another record high during August (chart below). This growth rate closely tracks the comparable growth rate in real GDP, which was 1.7% y/y through Q2-2022. That's even though real GDP fell slightly during the first half of this year.

Now the bad news:  The Index of Leading Economic Indicators (LEI) fell for the sixth consecutive month in August since reaching a new record high in February of this year, sinking 0.3% m/m and 2.7% over the period. In fact, on a y/y basis, it fell 1.0%. That negative reading is another early-warning sign of an approaching recession (chart below). Then again, there have been several previous similarly modest negative readings that did not lead to recessions.