Leading Index MoM

The Leading Index MoM is the 1-month change of the US Leading Economic Index (LEI) (2016=100). The LEI is a composite that blends 10 early-moving gauges of labor, orders, housing, markets, credit and household outlook. The publisher is The Conference Board, a US research group. The goal is early warning: LEI turns have led cycle turns by 7 months, while the Coincident Economic Index tracks activity at the same time.

It is released monthly in the third week at 10:00 AM ET, covering data through the prior month end. Inputs close about 2 business days before release. The same release also shows coincident and lagging indexes, contributions and diffusion.

Monthly revisions cover only the prior 6 months as late data replace estimates. Each benchmark recalculation rebuilds full history and breaks comparison with old releases. Markets read the 1-month direction with the 6-month rate and breadth. The 3Ds rule needs duration, depth and breadth together, never 1 month alone.

The index blends 10 inputs. Groups below show what each part captures.

• Labor hours and jobless claims: employers cut or add hours first, while new claims track layoffs and are inverted (falls help).

• Goods orders and ISM orders: real orders show demand entering production, while the ISM survey shows order books.

• Building permits: approvals for new private homes capture the early housing cycle.

• Stocks and credit: stock prices reflect investor outlook, while credit tightness is inverted (tighter hurts).

• Rate spread: the gap between long and short rates reflects growth bets.

• Consumer expectations: household outlook blends Michigan and Conference Board surveys of future business conditions.

Even a sharp broad fall is only a 7-month lead signal, and 1 month alone says less.

• Monthly move: for most series take the symmetric percent change (change divided by the 2-month average). For survey or level inputs take the simple difference, and flip the sign for inverted series (where a fall helps) like claims and credit.

• Standardize: multiply each move by its weight (bigger for steadier series, scaled to sum to 1 for consistency). If a component is missing, rescale the rest to still sum to 1 after adjustment.

• Add trend: add a small trend factor (fixed drift correction) that keeps long-run drift in line with the coincident index.

• Chain and rebase: chain the total into the level starting from a base level of 100 set earlier. Then rescale so average 2016 equals 100 (2016=100). Headline MoM is the percent change of that level.

• Diffusion: score each component 1.0 if up over 0.05%, 0.5 if flat under 0.05% and 0.0 if down. Average and multiply by 100 to get an index. Do this over 1-month and 6-month spans.

• Seasonal: source agencies adjust series with predictable seasonal patterns before they enter the index.

A monthly fall does not forecast GDP or mean recession is here. Warnings need duration, depth and breadth together. Activity at the same time is tracked by the coincident index.