During the first eight months of 2026, the Coincident Indicators Index (IIC), compiled by economist Ángel Rivera Montañez, fell 0.4%, indicating that Puerto Rico’s economy remains in contraction. Although data from the last two months show the decline stabilizing, the economist expects the economy to remain in negative territory for the rest of the year.
The IIC rose 0.6% in August compared with the prior month, following two earlier monthly increases, which suggests a moderation in the contraction. The index also rose 0.6% compared with the same month last year. In August, manufacturing was again "the main driver of the improvements observed over the last three months, supported by an increase of 1,100 jobs during this period," Rivera Montañez said.
He added that non-agricultural wage employment continues to rise, showing a labor market that is resilient in the face of high operating costs, particularly for energy, and institutional and geopolitical uncertainty. Puerto Rico’s economic situation meets the criteria for a recession, according to the National Bureau of Economic Research (NBER). The NBER defines a recession as a significant decline in economic activity, spread across the economy and lasting more than a few months; the common association with two consecutive quarters of decline is not always sufficient by itself.
The Leading Indicators Index (IIA) rose 0.6% in August, its third consecutive increase, but is down 0.5% cumulatively over the first eight months of the year. The recession-probability analysis keeps an active alert, indicating a recession is imminent or may already be under way.