Business Conditions Monthly December 2024

2025-02-18 01:10:00 ET

Summary

• In December 2024, the AIER Business Conditions Monthly indicators continued to show strength in leading and current economic activity, though the lagging components pointed to signs of underlying weakness.
• Of the twelve components of the Leading Indicator, five increased, six declined, and one remained unchanged in January.
• From January into February, US consumer sentiment weakened significantly, with the University of Michigan’s preliminary February index falling to 67.8, its lowest reading in seven months.

By Peter C. Earle

In December 2024, the AIER Business Conditions Monthly indicators continued to show strength in leading and current economic activity, though the lagging components pointed to signs of underlying weakness. The Leading Indicator remained elevated at 71, holding steady near its November level of 79 and reflecting sustained economic momentum heading into the new year. Similarly, the Roughly Coincident Indicator climbed to 92 from 75, marking its highest reading in the past 18 months and signaling broad-based expansion in real-time economic conditions. However, the Lagging Indicator fell sharply to 17 from 50 in November, suggesting deterioration in slower-moving areas of the economy, such as credit conditions and long-term employment trends. While forward-looking and present conditions remain firmly expansionary, the divergence with lagging indicators warrants continued attention....

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