Conference Board Leading Indicators
The Conference Board Leading Economic Index (LEI) is a composite indicator published monthly by The Conference Board that aggregates ten economic data series designed to signal turning points in the US business cycle before they are visible in official GDP and employment data.
The Conference Board Leading Economic Index is one of the most closely watched business cycle gauges in the United States. It is designed as a composite leading indicator — meaning it aggregates multiple individual series that historically preceded turning points in the overall economy by several months, providing advance notice of expansions or contractions.
The ten components of the US LEI span financial markets, manufacturing, consumer behavior, and credit conditions. They include average weekly manufacturing hours, average weekly initial claims for unemployment insurance (inverted, so lower claims are positive), manufacturers' new orders for consumer goods and materials, the ISM new orders index, manufacturers' new orders for nondefense capital goods, building permits for new private housing units, the S&P 500 stock price index, the Leading Credit Index (a proprietary Conference Board measure of financial conditions), the interest rate spread between 10-year Treasury bonds and the federal funds rate, and the average consumer expectations component from the University of Michigan Consumer Sentiment Survey.
The breadth of components is intentional: by aggregating financial, real-economy, and expectational data, the index is designed to be more robust than any single indicator. When most components are pointing in the same direction, the signal is considered more reliable. The Conference Board also publishes a Coincident Economic Index (CEI), which tracks current economic conditions, and a Lagging Index, which confirms turning points after they have occurred — the three together form a comprehensive business cycle framework.
The LEI has historically declined for several consecutive months before US recessions, making sustained declines a closely watched signal. In 2022-2023, the LEI declined for an extended period — the longest consecutive streak of monthly declines in modern history at that point — without a recession materializing immediately, illustrating that even well-regarded composite indicators have variable lead times and are not infallible.
For investors, the LEI is most useful as one input among many in a comprehensive macroeconomic assessment, interpreted alongside yield curve data, credit spreads, the Sahm Rule, and sector-level earnings trends.