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U.S. Leading Economic Index

Trading Term

The U.S. Leading Economic Index (LEI) is a composite economic indicator published monthly by The Conference Board. It is designed to forecast future economic activity by aggregating data from ten key components that tend to move ahead of the overall economy. As such, it serves as a reliable predictive tool for identifying turning points in the business cycle, such as upcoming expansions or recessions.

Components of the LEI include:

  • Average weekly hours in manufacturing
  • Average weekly initial claims for unemployment insurance
  • Manufacturers’ new orders for consumer goods and materials
  • ISM® new orders index
  • Building permits for new housing
  • Stock market performance (S&P 500)
  • Leading credit index
  • Interest rate spread (10-year Treasury minus federal funds rate)
  • Average consumer expectations for business conditions

When the LEI is rising, it generally signals future economic growth; when it is falling, it may indicate an economic slowdown or potential recession. Policymakers, investors, and business leaders use the LEI to guide strategic decisions based on forward-looking economic trends.

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