There is always plenty of sentiment expressed about the health of the U.S. economy and whether it could be heading into a recession. The team regularly consults consistent sets of metrics to assess whether it would be prudent to be prepared for a looming recession. One part of their meeting this week involved discussing and comparing two tools available on this topic.
One is the Conference Board Leading Economic Index® (LEI). While this has been a widely watched and referenced metric, the team has not had as much confidence in it recently. For the last couple of years, the LEI has been negative, which previously would track with the U.S. economy being in or heading into a recession, but the downturn traditionally expected by such numbers has not materialized.
A different tool that the team finds helpful is the “Anatomy of a Recession” by Clearbridge (https://www.franklintempleton.com/insights/anatomy-of-a-recession#recession-risk). Instead of a number, as with the LEI, this tool grades multiples measures as red (recession), yellow (caution), or green (expansion), along with an aggregate assessment of recession risk overall.
For example, here is the assessment as of the end of the first quarter of 2026::
Currently, most of the indicators are positive. This is a helpful set of data that the team consults regularly. For a sense of why the team considers the data positive for the economy as a whole, this comparison chart shows what these same indicators looked like during recessions:
If current metrics drifted toward something similar to what they were on these other occasions, then the team would prepare to pivot toward exploring what opportunities would be more likely in such an economic environment.
Despite the readings of the LEI, but buoyed by assessment like Clearbridge’s Recession Risk, the team is currently bullish on the U.S. economy as a whole and seeks the best opportunities for Piton clients in such an environment. Along with other metrics and data, the team will keep checking on the pulse of the economy. The Piton Investment Team will always seek the best opportunities and fits for Piton’s portfolios, no matter the economic conditions generally, but currently the search operates with the expectation of a robust economic environment.
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