The Conference Board Leading Economic Index is an American economic index 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.

One problem with the Leading Economic Index is that the time lag between the signal of a recession and the actual recession has varied widely. In January 2001 The Conference Board revised the methodologies used in constructing the Index of Leading Indicators to make the index both more timely and more useful (see the report by Robert H. McGuckin for a full discussion of these revisions).

Also, while this index correctly forecast each of the eight recessions during the 1959-2009 period, it also forecast recessions that did not occur.

The ten components of the Leading Economic Index include:

1. Average weekly hours worked by manufacturing workers
2. Average number of initial applications for unemployment insurance
3. Amount of manufacturers' new orders for consumer goods and materials
4. Amount of manufacterers' new orders for capital goods unrelated to defense
5. Speed of delivery of new merchandise to vendors from suppliers
6. Amount of new building permits for residential buildings
7. The S&P 500 stock index
8. Inflation-adjusted money supply (M2)
9. Spread between long and short interest rates (i.e. the yield curve)
10. Consumer expectations

Recently other sources of leading indicators have been developed in attempts to provide even more timely data. One example which deals only with the consumer portion of the U. S. economy has been constructed by the Consumer Metrics Institute and includes daily indexes of consumer activities in several segments of that economy.

See also

• Economic indicators

External links

• The Conference Board's Global Business Cycle Indicators
• OECD leading indicator statistics
• Consumer Leading Indicators - Consumer Metrics Institute