Composite Index Of Lagging Indicators

AAA

DEFINITION of 'Composite Index Of Lagging Indicators'

An index published monthly by the Conference Board that is used to confirm the direction of the economy's movements in past months. The index is made up of the following seven economic components, whose changes tend to come after changes in the overall economy:

1. The value of outstanding commercial and industrial loans
2. The change in the Consumer Price Index for services from the previous month
3. The change in labor cost per unit of labor output
4. The ratio of manufacturing and trade inventories to sales made
5. The ratio of consumer credit outstanding to personal income
6. The average prime rate charged by banks
7. The inverted average length of employment

INVESTOPEDIA EXPLAINS 'Composite Index Of Lagging Indicators'

As it measures the economic activities of previous months, the Composite Index of Lagging Indicators is used as an after-the-fact way to help confirm economists' assessments of current economic conditions. For this purpose, the Composite Index of Lagging Indicators is best used in conjunction with the Composite Index of Coincident Indicators and Composite Index of Leading Indicators.

RELATED TERMS
  1. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. Lagging Indicator

    1. A measurable economic factor that changes after the economy ...
  3. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  4. Business Cycle Indicators - BCI

    Composite of leading, lagging and coincident indexes created ...
  5. Central Bank

    The entity responsible for overseeing the monetary system for ...
  6. Consumer Confidence Index - CCI

    A survey by the Conference Board that measures how optimistic ...
RELATED FAQS
  1. What are leading, lagging and coincident indicators? What are they for?

    An indicator is anything that can be used to predict future financial or economic trends. For example, the social and economic ... Read Full Answer >>
  2. How do open market operations affect the money supply of an economy?

    The open market operations conducted by the Federal Reserve affect the money supply of an economy through the buying and ... Read Full Answer >>
  3. Why are economists interested in the consumer surplus?

    Economists are interested in consumer surplus because it measures economic welfare, plays a large part in changing market ... Read Full Answer >>
  4. What economic indicators are important to consider when investing in the chemicals ...

    The most important economic indicators to consider when investing in the chemicals sector are economic growth, interest rates, ... Read Full Answer >>
  5. What economic factors affect the performance of the consumer packaged goods industry?

    Three of the primary economic factors that influence the performance of companies in the consumer packaged goods (CPGs) industry ... Read Full Answer >>
  6. What's the most accurate way to find out a nation's nominal GDP?

    The data for gross domestic product, or GDP, is compiled by statistical governmental agencies in each country and is aggregated ... Read Full Answer >>
Related Articles
  1. Markets

    A Guide To Conference Board Indicators

    Learn to put the CB data sets to trading use. Each chapter takes you through one of the board's benchmark indicators or surveys, their significance and their applications.
  2. Retirement

    Economic Indicators To Know

    The economy has a large impact on the market. Learn how to interpret the most important reports.
  3. Economics

    What is an Economic Dove?

    Dove is an economic term describing an economic monetary adviser who favors keeping interest rates low because it stimulates the economy.
  4. Economics

    When Global Economies Converge

    The Divergences in global economic look very much like an explanation for what happened last year, though market observers continue to tout about it.
  5. Investing

    Do Record Stock Highs Signal A Top?

    Despite higher rates, U.S. stocks have been posting new records in recent weeks, despite investor concerns about slowing U.S. corporate profit growth.
  6. Investing

    The Case For Stocks Today

    Last week, U.S. equities advanced with the S&P 500 Index notching new records. Investors are now getting nervous with rate and currency volatility spiking.
  7. Investing

    Which Dow Jones Stocks are Safe? Which are Risky?

    In a situation where our sustained bull run could turn into a sell-off rather quickly, here are four somewhat safe Dow stocks and four to be wary of.
  8. Economics

    The Big Chill: What’s Wrong With The U.S. Consumer

    Based on the most recent April data, investors may, once again, be disappointed when the second-quarter gross domestic product (GDP) report comes in.
  9. Economics

    How To Calculate The GDP Of A Country

    We explain how to calculate the GDP of a country using two different approaches.
  10. Economics

    Why The U.S. Economy Is Ready For Liftoff

    Though the U.S. economy is once again underperforming expectations, as it has for the past five years, the economy is ready for a (Fed) interest rate hike.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center