Composite Index Of Leading Indicators

Composite Index of Leading Indicators is measured as a weighted mean value composed of the following positions:

 

• The average weekly hours worked in manufacturing sector; 
• Time index required for fulfilling received orders (as percentage);  
• The number of manufacturers' new orders for consumer goods and materials; 
• New orders for non-defense capital goods; 
• The amount of approved permits for new buildings;  
• 500 stocks index;  
• The volume of monetary supply М2; 
• The spread between returns of 10-year Federal Treasury bonds and Fed funds interest rates (%); 
• Consumer sentiment index

 

Since the index represents weighted mean value of above-listed indicators, it is considered that it can forecast economic tendency of the state for half of year in advance. If over the last three months, the index value has negative dynamic, then the conclusion about slowdown of economic development is made.

The index is published monthly, during the first week, at 10:00 a.m EST (New York). Respond to published data is minor, though the index is important. Such a respond can be explained by a later publication of the index – in a month after announcing of all its components, therefore, its approximate value is already known.

You might be also interested in: