Oil Prices and Supply Chain Stress Sour Economic Outlook

The Conference Board’s Leading Economic Index (LEI) declined by 0.6% in March amid higher oil prices and stressed supply chains.

The LEI is based on 10 components and aims to indicate where the economy is heading in the near term, The Conference Board said in a Thursday (April 30) press release.

The index’s decline in March was driven by weakening of three of those components: building permits, consumer expectations and stock prices.

“The LEI continues to signal a slowdown in the economy over the coming months, as higher oil prices and supply chain tensions will likely place additional upward pressure on inflation and further reduce consumers’ purchasing power,” Justyna Zabinska-La Monica, senior manager, business cycle indicators at The Conference Board, said in the release.

The index also signals that hiring may slow, unemployment may edge higher, consumer spending is likely to weaken, and business investment and defense-related activity are likely to strengthen, Zabinska-La Monica said.

The Census Bureau reported Wednesday (April 29) that new orders for nondefense capital goods, excluding aircraft — a metric dubbed “core capital goods” by economists — rose 3.3% in March, accelerating from the increase of 1.6% in February.

Both Bloomberg and Reuters reported that this increase was driven by the continued investment businesses are making in artificial intelligence (AI) and data centers.

The University of Michigan’s Surveys of Consumers found that in April, consumers’ expectations for business conditions on both short and long time horizons declined to levels that were about as low as those seen a year earlier when tariffs were imposed.

The Surveys of Consumers attributed the decline in this and other measures to the impact the Iran conflict is having on gasoline and potentially other prices.

The PYMNTS Intelligence report “Forecasting Under Pressure: New Data Shows Uncertainty Is Still Running High” found business uncertainty remains high and that conflict and broader geopolitical stress introduced a new shock in March.

“The takeaway is clear: business forecasting is increasingly shaped by recurring uncertainty rather than stable cycles,” the report said. “March 2026 brought a different shock than early 2025, but the effect looks much the same: forecasting gets harder, goods firms feel the hit first and firms facing the most pressure pay a steep price.”