U.S. leading economic indicators edged higher in July as everything except consumer expectations took a turn for the better, indicating that moderate growth could be coming. The Leading Economic Index published by The Conference Board, rose by 0.2% to 99.5, following an upwardly revised 0.1% decrease in June.
The indicators improved in Jul-26, pointing to firmer near-term growth momentum. The Conference Board Leading Economic Index (LEI) rose by +0.2%mom to 99.5 (Jun-26: -0.1%mom), better than +0.1%mom predicted by the market consensus. Moreover, the LEI’s 6-month growth turned positive at +0.2% for the first time in around 4 years, compared to -1.3% in the preceding 6-month period, suggesting that downside risks to the US growth outlook have eased.
The monthly improvement in LEI was relatively broad-based, although households remained the weak spot. Most LEI components improved last month, supported by financial-market and business-related indicators, while consumer expectations remained a drag. This is consistent with the increasingly uneven composition of US growth; business investment, particularly AI-related capital expenditure, remains supportive, whereas elevated living costs and softer labour-market conditions constrain household spending. According to the Conference Board, the US real GDP is projected to grow by +1.9% in both 2026 and 2027.
Overall, the improvement in the leading index suggests the US economy should remain in expansion, with growth momentum stabilising and potentially improving modestly. The positive turn in the 6-month LEI trend also reduces the likelihood of a significant near-term downturn. MBSB noted that the weaker consumer spending and labour-market momentum, suggest that the economy is unlikely to return to stronger growth rates seen previously. The house expects the US economy to remain resilient, albeit growing modestly, supported by business investment in contrast to constrains on household demand.
