Where is this economy going? Honestly, we don’t know. Economists don’t know. The stock market — we say it all the time here— is not the economy, and it doesn’t know, either.

Hard economic data about how different sectors have actually been performing, like home building, retail sales and job creation, have been holding up pretty well. The ‘soft’ data —how businesses and consumers are feeling — have been more downbeat. 

The Conference Board’s latest Leading Economic Index, which pulls a bunch of data points together to try to predict where the economy is going, was down by 0.3% in February — the third straight monthly decline. What does it mean?

The LEI crunches together 10 key data points, including manufacturing orders, jobless claims, consumer confidence and stocks. 

A falling LEI from December to February signals the economy is slowing and faces headwinds, said Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board.

But she said what matters most is the six-month trend, and that’s been gradually improving.

“It has not been as negative as 2023 or the beginning of 2024, not triggering recession signals,” she said.

Now, one big caveat here, February’s LEI doesn’t include what happened in March; rising fears of a global trade war, and a big selloff in stocks. 

“So the market has pulled back from its all-time high,” said Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute.

He said in the overall economy, we’re not seeing “a cascade of weakness, where one thing leads to another leads to another.”

Instead, things just seem to gradually be getting a little worse, said Thomas Martin, a senior portfolio manager at Globalt Investments.

“Employment has been weakening, sort of, but not too much. Consumer spending — it’s still OK. The odds of a recession have increased, but they’re not alarming,” he said.

Lower-income consumers are increasingly pulling back in the face of high prices, said Eric Freedman, chief investment officer at U.S. Bank.

Still, with incomes rising faster than inflation, and business balance sheets strong: “We do retain a glass-half-full perspective. We do concurrently recognize that that glass could spill, quite quickly,” he said.

With the next wave of unsettling news on tariffs, inflation, government spending cuts, and all the rest.