The Conference Board Leading Economic Index® (LEI) for the U.S. declined further in January 2024. The LEI provides an early indication of significant turning points in the business cycle and is meant to gauge future economic activity. The LEI decreased (-0.4%) to 102.7 (2016=100), the lowest level since April 2020, and follows a (- 0.2%) decline in December 2023. Over the six-month period from July 2023 to January 2024, the LEI dropped (-3.0%), although this decline was smaller than the (-4.1%) decrease over the previous six months. The decline in the LEI was attributed to several factors. Weekly hours worked in manufacturing continued to decline, and the yield spread remained negative. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board, stated, "While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024). As a result, the leading index currently does not signal a recession ahead."

The minutes from the January 30-31 Federal Open Market Committee (FOMC) showed meeting participants hedging. The minutes showed optimism, stating “In discussing the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle”. The minutes also displayed caution as “Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent”. The minutes reinforce that the FOMC is in no hurry to cut rates. The benchmark borrowing rate was left unchanged. The minutes also noted upcoming decisions on when and how to stop reducing the size of the Fed's balance sheet stating that “many participants suggested that it would be appropriate to begin in-depth discussions of balance sheet issues at the Committee's next meeting to guide an eventual decision to slow the pace of runoff”. Since June 2022, more than $1.3 trillion in Treasurys and mortgage-backed securities have been allowed to roll off rather than reinvested.

The National Association of Realtors reported that sales of existing homes expanded a 5-month high (+3.1%) in January to a seasonally-adjusted annual rate of 4.0M, down (-1.7%) as compared to January 2023. "While home sales remain sizably lower than a couple of years ago, January's monthly gain is the start of more supply and demand," said NAR Chief Economist Lawrence Yun. "Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year." Sales of single-family homes moved up (+3.4%) to a 3.6M annual rate (-1.4% Y/Y) and existing condo sales were unchanged at a 400K annual rate (-4.8% Y/Y). Total housing inventory reported up (+2.0%) to 1.01M (+3.1% Y/Y). Properties typically remained on the market for 36 days, up from 29 days in December. Unsold inventory reported at a 3.0 month run rate, down from 3.1 months in December, and up from 2.9 months in January 2023. The median sales price increased to $379,100 (+5.1% Y/Y). The median existing single-family home price was $383,500 (+5.0% Y/Y), while the median existing condo price was $339,400 (+5.7% Y/Y). Regionally sales were mixed – Northeast (0.0% M/M, -5.9% Y/Y), Midwest (+2.2% M/M, -3.1% Y/Y), South (+4.0% M/M, -1.6% Y/Y), and West (+4.3% M/M, +2.8% Y/Y).