Aug 7, 06:51 AM

US LEI Falls 17.8%, Signaling Recession; German Manufacturing Drops 1.9% in June Amid Trump Tariffs and Weak Consumer Confidence

The US economy is showing signs of recession, with the Conference Board Leading Economic Index (LEI) experiencing a 17.8% drawdown, the largest since the Financial Crisis. The LEI fell 4.0% year-over-year in June to its lowest level in 11 years, marking the third consecutive month signaling a recession. Meanwhile, Europe is facing economic challenges, particularly Germany, which has seen its industrial production drop to the lowest level since May 2020. In June 2025, German manufacturing output fell 1.9% compared to May, with energy-intensive industrial production more than 20% below levels from a decade ago. This decline reflects the ongoing European energy crisis and the impact of curtailed trade conditions with the US amid President Donald Trump’s tariff policies. German consumer confidence is also depressed, with the index falling to -21.5 in July from -20.3 in June, missing expectations and remaining below levels recorded during the Great Financial Crisis and the 2020 crisis. European companies are lagging behind their US counterparts in second-quarter 2025 earnings, as trade tensions continue to weigh on market recovery prospects.