Index of Leading Indicators
Encyclopedia
The Conference Board Leading Economic Index is an American
economic leading indicator intended to forecast future economic activity. It is calculated by The Conference Board
, a non-governmental organization
, which determines the value of the index from the values of ten key variables
. These variables have historically turned downward before a recession
and upward before an expansion
. The single index value composed from these ten variables has generally proved capable of predicting recessions over the past 50 years.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
economic leading indicator intended to forecast future economic activity. It is calculated by The Conference Board
The Conference Board
The Conference Board, Inc. is a non-profit, non-partisan business membership and research group. It has approximately 12,000 executives in its network, from 1200 corporations in 60 countries. It holds conferences, convenes executives, conducts economic and business management research, and is seen...
, a non-governmental organization
Non-governmental organization
A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...
, which determines the value of the index from the values of ten key variables
Variable (mathematics)
In mathematics, a variable is a value that may change within the scope of a given problem or set of operations. In contrast, a constant is a value that remains unchanged, though often unknown or undetermined. The concepts of constants and variables are fundamental to many areas of mathematics and...
. These variables have historically turned downward before a recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
and upward before an expansion
Economic expansion
An economic expansion is an increase in the level of economic activity, and of the goods and services available in the market place. It is a period of economic growth as measured by a rise in real GDP.The explanation of such fluctuations in aggregate economic activity is one of the primary...
. The single index value composed from these ten variables has generally proved capable of predicting recessions over the past 50 years.
- The United States Department of LaborUnited States Department of LaborThe United States Department of Labor is a Cabinet department of the United States government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, re-employment services, and some economic statistics. Many U.S. states also have such departments. The...
’s monthly report on the unemployment rate, average hourly earnings and the average workweek hours from the Employment Situation report - The United States Department of LaborUnited States Department of LaborThe United States Department of Labor is a Cabinet department of the United States government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, re-employment services, and some economic statistics. Many U.S. states also have such departments. The...
’s weekly report on first-time claims for state unemployment insurance - The United States Census BureauUnited States Census BureauThe United States Census Bureau is the government agency that is responsible for the United States Census. It also gathers other national demographic and economic data...
’s monthly consumer goods and materials report from the Preliminary Report on Manufacturers' Shipments, Inventories, and Orders - The United States Census BureauUnited States Census BureauThe United States Census Bureau is the government agency that is responsible for the United States Census. It also gathers other national demographic and economic data...
’s monthly non-defense capital goods report from the Preliminary Report on Manufacturers' Shipments, Inventories, and Orders - The United States Census BureauUnited States Census BureauThe United States Census Bureau is the government agency that is responsible for the United States Census. It also gathers other national demographic and economic data...
’s monthly report on building permits from the Housing Starts and Building Permits report - The difference (spread) between the interest rates of 10-year United States Treasury notes and the federal funds rateFederal funds rateIn the United States, the federal funds rate is the interest rate at which depository institutions actively trade balances held at the Federal Reserve, called federal funds, with each other, usually overnight, on an uncollateralized basis. Institutions with surplus balances in their accounts lend...
- The Federal Reserve's inflation-adjusted measure of the M2 money supplyMoney supplyIn economics, the money supply or money stock, is the total amount of money available in an economy at a specific time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits .Money supply data are recorded and published, usually...
- The Institute for Supply ManagementInstitute for Supply ManagementFounded in 1915, the Institute for Supply Management is the first supply management institute in the world.ISM is a not-for-profit educational association that serves professionals and organizations with an interest in supply management in more than 80 countries...
’s monthly ISM Index of Manufacturing including: supplier deliveries, imports, production, inventories, new orders, new export orders, order backlogs, prices and employment. - The S&P 500S&P 500The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
- The University of Michigan Consumer Sentiment IndexUniversity of Michigan Consumer Sentiment IndexThe University of Michigan Consumer Sentiment Index Thomson Reuters/University of Michigan Surveys of Consumers is a consumer confidence index published monthly by the University of Michigan and Thomson Reuters. The index is normalized to have a value of 100 in December 1964...
's consumer expectations