The Augusta Leading Economic Index (LEI) fell 1.1 percent in December 2023 from November 2023. It is 2.5 percent lower than December 2022. The index has fallen 12 percentage points from its all-time peak in June 2022, with data going back to 2007 (see chart below).
The major components that caused the monthly decline were residential permits and initial claims for unemployment insurance. Housing permits fell 21 percent in December from November and were 813 lower in 2023 than in 2022. Initial claims for unemployment insurance claims rose 27 percent and represented over 1,000 more claims in 2023 than in 2022. This downward trend is concerning as they are the most local of the components in the index, both representing the Metropolitan Statistical Area (MSA).
The other components of the index increased. Job openings in South Carolina and Georgia (weighted by employment by county in the MSA) arrested their three-month slump by increasing 5.3 percent and the Dow Jones Industrial Average finished the year up 4,500 points. The Dow Jones has had a strong start to 2024 which will have a beneficial effect on the LEI in the coming months. However, higher-than-expected inflation is continuing to present downward pressure on the real savings component of the LEI.
