Conference Board Growth Index Slips as Consumer Expectations and Building Permits Drop

Weakening consumer expectations for business conditions and a decline in building permits for private housing drove a 0.2% decline in The Conference Board’s Leading Economic Index (LEI) in June, the organization said in a Monday (July 20) press release.

While the other eight components of the LEI improved in June, these gains were more than offset by the drop in consumer expectations and building permits, according to the release.

The LEI aims to indicate where the economy is heading in the near term, per the release.

“Despite the recent decline, the LEI’s six- and 12-month growth rates, while negative, were stable,” Justyna Zabinska-La Monica, senior manager, business cycle indicators, at The Conference Board, said in the release. “Consumer spending is weakening, but strong business investment related to AI is expected to support economic activity while inflation continues to improve. The Conference Board raised its forecast from 1.8% to 1.9% [year-over-year] GDP growth for 2026.”

The University of Michigan’s Surveys of Consumers found that consumer sentiment improved by 10% in early July, driven in part by consumers’ expectations for year-ahead business conditions.

The survey’s preliminary results for July gauged the Index of Consumer Sentiment at 54.4, the highest reading since February’s 56.6.

“All five index components improved, led by significant 20% increases in buying conditions for durables as well as year-ahead business conditions,” Surveys of Consumers Director Joanne Hsu said in a press release. “This month’s rise in sentiment was pervasive across the population, seen across groups by age, income, wealth and political party.”

The National Federation of Independent Business (NFIB) said Tuesday (July 14) that small business optimism increased in June, driven by owners’ expectations for better business conditions and sales.

The net percent of small business owners expecting better business conditions in the next six months increased for the first time this year, helping to boost the NFIB Small Business Optimism Index close to its 52-year average.

“Current economic conditions present small business owners with both encouraging developments and ongoing challenges,” the NFIB report’s authors wrote, adding that lower oil prices were providing relief for almost all businesses and leaving consumers with more discretionary income.