Leading Economic Index (LEI)

The Leading Economic Index, published monthly by the Conference Board since the methodology's origins at the US Department of Commerce in the 1960s (with Conference Board stewardship since 1995), is a composite index built from ten individual component indicators, including average weekly manufacturing hours, initial jobless claims, new orders for consumer goods, building permits and the interest rate spread between the 10-year Treasury and federal funds rate, selected specifically because each has historically tended to change direction before the broader economy does. Designed to anticipate turning points in the business cycle rather than describe current conditions, the LEI is one of the most widely cited single composite gauges used to forecast whether the US economy is heading toward expansion or recession, alongside a comparable Coincident Economic Index and Lagging Economic Index the Conference Board also publishes.