In January, the Conference Board’s Leading Indicator for the US economy rose 0.6% MoM versus 0.5% MoM expected. While the absolute change in the Leading Indicator was certainly positive, we prefer to look at how the Leading Indicator performs relative to the coincident indicator index. The level of this reading isn’t particularly important but its direction is a very good advance warning of approaching recessions. As shown in the chart below, the ratio between the Leading and Coincident Indicators tends to drop sharply immediately before and during a recession. Over the last few months, the ratio has started to turn upwards again after a period of stagnation since the post-recession high print of 1.098 in June 2015. A new high print, which looks quite likely after the 1.097 level printed this month, would be an indicator that recession isn’t likely in the near term. With a number of other pieces of economic data suggesting a ramp up in business activity and consumer spending, the Leading/Coincident Indicator ratio adds to the case that a recession in US economic activity is still nowhere close.