Definition: This index factors in 10 leading indicators, or economic indicators, that tend to change before the economy as a whole changes.
Description: The Leading Indicators Index provides an overview of the US economy, and is comprised of the following 10 components:
The Leading Indicators Index has a good track record of predicting dips in the US economy. As a rule of thumb, if the index drops three months in a row, a recession is likely to follow. From 1952 to 1998, the index predicted ten recessions in the US economy, of which seven actually occurred. The Leading Indicators Index can signal a change from economic growth to recession around ten months in advance, but is only able to predict a change from recession to growth 1-2 months in advance.
Influence: An increase in this index tends to boost the US dollar.
Market Impact: Low
Released: At the beginning of each month at 15:00 GMT
Source: The Conference Board (New York)