The Index of Leading Economic Indicators (LEI) attempts to predict future expansion or contraction of the economy from the values of key variables. The index historically turns down before a decline in growth and upward before an expansion. LEI is tabulated by the Conference Board, a global independent source of economic and business knowledge. However, it is impossible to tell beforehand exactly what the economy will do, and looking back can identify trends but not provide guarantees. As a result, the index is not completely accurate.
Consumer confidence is one of the factors considered in this index. High consumer confidence indicates that consumers might buy more, and thus the economy might improve. Other variables included in the LEI are initial unemployment claims rates, new orders for consumer goods, plant and equipment orders, building permits, and stock prices measured by the Standard & Poor’s (S&P) 500.
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