The Leading Economic Index (LEI) for Brazil, released by FGV’s Brazilian Institute of Economics (IBRE) and The Conference Board (TCB), dropped 0.1% between May and June, down to 112.7 points. Four of the eight component series helped drive the indicator down, particularly the Consumer Expectations Index, which dropped 4.5%.

The Coincident Economic Index (CEI), which measures current economic conditions, rose 2.2% in the same period.

“In spite of the LEI dropping once again in June, the positive result of the CEI tells us that the negative effects of the strikes in May were not as severe as initially suggested by the expectation indicators”, said Paulo Picchetti, CPI Coordinator at IBRE. “The recovery of the activity level seems to indicate that a downturn in the economic cycle is unlikely at this point”, said Picchetti.

The LEI comprises eight economic components to gauge Brazil’s economic activity. Each of them has been individually proven to effectively anticipate economic trends. The incorporation of individual indicators into a compound index filters the so-called “noise”, in order to effectively reveal actual economic trends.

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