Key points
- Published monthly by The Conference Board.
- A sustained, broad decline over about six months has historically signalled recession risk.
- Components include jobless claims, building permits, new orders and the yield curve.
Example
The Conference Board looks at how far the index has fallen over six months and how many of its ten components are falling. A deep and widespread fall has usually come before recessions.
In history
The LEI fell for about two years from early 2022, a signal that had always preceded recessions before. None followed, a reminder that indicators can give false alarms.
Related terms