series of indicators that tend to predict future changes in economic activity; officially called Composite Index of 11 Leading Indicators. This series is published monthly by the U.S. Department of Commerce and includes average work week, average weekly initial claims, index of net business formation, new orders, and stock prices. The index of leading indicators, the components of which are adjusted for inflation, has an excellent track record of forecasting ups and downs in the business cycle.
economic indicator believed to anticipate changes in the business cycle, by peaking or bottoming out before general business conditions change direction. Leading indicators precede changes in the economy by 1 to 12 months. The Conference Board, a business research organization, tracks the following indicators: the money supply, changes in business credit employment statistics; new investments; business formations and business failures; corporate profits and stock prices; and business inventories.
components of an index released monthly by the U.S. Commerce Department's Bureau of Economic Analysis. These often forecast business conditions, as contrasted with coincident or lagging indicators.
components of indicators released monthly by the Conference Board, along with the Index of lagging indicators and the Index of coincident indicators. The 11 components are: the average workweek of production workers; average weekly claims for state unemployment insurance; manufacturers' new orders for consumer goods and materials; vendor performance (companies receiving slower deliveries from suppliers); contracts and orders for plant and equipment; building permits; change in manufacturers' unfilled orders for durable goods; changes in sensitive materials prices; stock prices; money supply (M-2); and index of consumer expectations. The index of leading indicators, the components of which are adjusted for inflation, accurately forecasts the ups and downs of the business cycle.
