Composite Index Of Lagging Indicators


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

BREAKING DOWN '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.

  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. Business Cycle Indicators - BCI

    Composite of leading, lagging and coincident indexes created ...
  4. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  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 Articles
  1. Retirement

    Economic Indicators To Know

    The economy has a large impact on the market. Learn how to interpret the most important reports.
  2. 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.
  3. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  4. Economics

    Is the U.S. Economy Ready for Liftoff?

    The Fed continues to delay normalizing rates, citing inflation concerns and “global economic and financial developments” in explaining its rationale.
  5. Investing News

    Thursday Intel: Will Q4 Offer a Fresh Start?

    Investor hopes for a fresh start to the world economy in this quarter may be misplaced.
  6. Economics

    What's Economic Capital?

    While regulatory and economic capital use some of the same measurements of risk to determine how much capital a firm should hold in reserve, economic capital uses more realistic measures.
  7. Economics

    What is Economic Rent?

    Economic rent typically occurs when a product, service or property is in short supply, but demand is high.
  8. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  9. Economics

    A Long Road to Full Diplomatic Relations with Cuba

    Over the past 50 years, the U.S. and Cuba have remained at odds, only recently to restore diplomatic ties. What does this mean?
  10. Markets

    Is Another Bear Market Ahead?

    With market volatility recently reaching its highest level, investors are questioning what the outlook is for U.S. stocks in 2015 and beyond.
  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. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  3. What types of expenses are factored into autonomous consumption?

    Autonomous consumption is the level of consumption necessary to support everyday life in a zero-income scenario. Put another ... Read Full Answer >>
  4. What are some of the key shortcomings of how the U.S. unemployment rate is determined ...

    Each month, the Bureau of Labor Statistics (BLS), a division of the U.S. Department of Labor, announces the unemployment ... Read Full Answer >>
  5. Why would a country's gross domestic product (GDP) and gross national income (GNI) ...

    A country’s gross domestic product, or GDP, and gross national income, or GNI, are likely to differ considerably because ... Read Full Answer >>
  6. What are key economic growth rates that can be used to determine the economic health ...

    Before you can determine the proper indicators for economic health, you must understand what causes an economy to grow and ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  2. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  3. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  4. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  5. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  6. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!