The Conference Board released their Leading Economic Index (LEI), which is a composite of economic indexes that can signal peaks and troughs in the business cycle. May brought a 0.7% decline, marking the fourteenth consecutive month of contraction and pointing to “weaker economic activity ahead,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators. The last time this index fell for fourteen straight months was in 2007, before the great recession.

There are also signs of stalling economic conditions overseas, as the Global Purchasing Managers’ Index (PMI) showed that Japan is clearly in contraction while Australia, the Eurozone, and the United Kingdom all slowed and are just above contraction territory.

What’s the bottom line? The globe is interconnected, and economies of different countries rely on each other for trade. As a result, recessions tend to be globally synchronized because loss of demand in one country tends to pull activity in other areas down. While there is usually an average of 50% of global economies in a recession at the same time, certain circumstances like the COVID pandemic can lead to a larger level of synchronicity. This ongoing situation remains important to monitor in the months ahead.