Composite Index of Leading Indicators

What is the 'Composite Index of Leading Indicators'

An index published monthly by the Conference Board used to predict the direction of the economy's movements in the months to come. The index is made up of 10 economic components, whose changes tend to precede changes in the overall economy. These 10 components include:

1. the average weekly hours worked by manufacturing workers
2. the average number of initial applications for unemployment insurance
3. the amount of manufacturers' new orders for consumer goods and materials
4. the speed of delivery of new merchandise to vendors from suppliers
5. the amount of new orders for capital goods unrelated to defense
6. the amount of new building permits for residential buildings
7. the S&P 500 stock index
8. the inflation-adjusted monetary supply (M2)
9. the spread between long and short interest rates
10. consumer sentiment

BREAKING DOWN 'Composite Index of Leading Indicators'

The Composite Index of Leading Indicators is a number that is used by many economic participants to judge what is going to happen in the near future. By looking at the Composite Index of Leading Indicators in the light of business cycles and general economic conditions, investors and businesses can form expectations about what's ahead, and make better-informed decisions.

RELATED TERMS
  1. Composite Index Of Lagging Indicators

    An index published monthly by the Conference Board that is used ...
  2. CB Leading Index

    An index that is a composite average of ten leading indicators ...
  3. Composite Index of Coincident Indicators

    An index published by the Conference Board that is a broad-based ...
  4. Composite

    A grouping of equities, indexes or other factors combined in ...
  5. Composite Index

    A grouping of equities, indexes or other factors combined in ...
  6. NYSE Composite Index

    An index that measures the performance of all stocks listed on ...
Related Articles
  1. Markets

    Conference Board: Composite Index Of Leading Indicators

    By Chris Stone Contact Chris The purpose of the Board's Business Cycle Indicators (BCI) is to provide ways for analyzing the expansions and contractions of the economic cycle. The Composite ...
  2. Markets

    Conference Board: Composite Index Of Coincident Indicators

    By Chris Stone Contact Chris Using National Bureau of Economic Research (NBER) data in the 1930s, Arthur Burns and Wesley Mitchell, (as we discuss in the previous chapter 3) popularized the ...
  3. Markets

    Conference Board: Composite Index Of Lagging Indicators

    By Chris Stone Contact Chris The third component of the Business Cycle Indicators (BCI) is the Composite Index of Lagging Indicators. This rarely cited but useful index is the final confirmation ...
  4. Professionals

    Economic Indicators

    There are various economic activities that one can look at to try to identify where the economy is in the business cycle. An individual can also use these economic indicators as a way to try ...
  5. Investing Basics

    What is a Leading Indicator?

    A leading indicator is a measurable economic factor that tends to change right before the economy starts to change.
  6. Markets

    Conference Board: Conclusion

    By Chris Stone Contact Chris Since its beginning in 1916, the Conference Board (CB) has been a force for positive progress in the world of business. The research it conducts and the conferences ...
  7. Professionals

    Domestic vs. Global Indexes

    CFA Level 1 - Domestic vs. Global Indexes. Learn the differences between domestic and global indexes. Provides examples of each, including bond and composite indexes.
  8. Professionals

    Economic Indicators (Part 2 of 2)

    Leading, Coincident and Lagging Indicators
  9. Options & Futures

    Using Index Futures To Predict The Future

    Want to know whether the stock market will open up or down? Check out the index futures.
  10. Investing Basics

    An Introduction To Stock Market Indexes

    Investopedia explains the five most talked about indexes and what makes them all different.
RELATED FAQS
  1. What are the most common market indicators to follow the U.S stock market and economy?

    Understand some of the key indicators analysts use to follow the U.S. stock markets and to assess the overall condition of ... Read Answer >>
  2. What are the most important equity market indexes?

    Discover the most important equity market indexes. Stock market indexes are tools to evaluate the performance of the stock ... Read Answer >>
  3. How can I find out if a company I like is included in an index?

    There are a few ways to find out what indexes a company is involved in, and investors should take note of them when they ... Read Answer >>
  4. How should an investor interpret the consumer and business confidence index when ...

    Learn how investors benefit from watching the consumer and business confidence indexes, along with other key metrics, when ... Read Answer >>
  5. What does the S&P 500 index measure and how is it calculated?

    Learn about what exactly the S&P measures and why it's used by market participants as a tool to understand the broader stock ... Read Answer >>
  6. How are S&P 500 index components weighted?

    Learn about how components of the S&P 500 are weighted, and how this calculation favors certain stocks in being more representative ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center