The Leading Economic Index (LEI) is a composite index released every month by The Conference Board. As background, The Conference Board addresses three groups of composite indicators: the Leading Index, the Coincident Index, and the Lagging Index. These indicators derive their names from the relationship they keep with the overall business cycle and help to “summarize and reveal common turning point patterns in economic data.” Leading indicators tend to increase or decrease before the economic activity improves or declines. Coincident indicators tend to increase and decrease at the same time the overall economy changes, and lagging indicators increase or decrease only after the economy changes.

For forecasting purposes, leading indicators are the most useful. The LEI is comprised of ten individual indicators including:

1. Average weekly hours, manufacturing
2. Average weekly initial claims for unemployment insurance
3. Manufacturers’ new orders, consumer goods and materials
4. ISM® Index of New Orders
5. Manufacturers' new orders, non-defense capital goods excluding aircraft orders
6. Building permits, new private housing units
7. Stock prices, 500 common stocks
8. Leading Credit Index™
9. Interest rate spread, 10-year Treasury bonds less federal funds
10. Average consumer expectations for business conditions.

Dr. Ed Seifried is Chief Economist and Strategic Advisor at BNK Advisory Group. He is also professor of economics and business at Lafayette College in Easton, PA, and a faculty member of numerous graduate banking schools, including Stonier Graduate School of Banking and the Graduate School of Retail Bank Management. He also serves as dean of The West Virginia and Virginia Banking Management Schools. Dr. Seifried is a nationally recognized speaker and is the author of both academic and popular articles and books. He is the co-author of BNK's Art of Strategic Planning in Community Banks and The Art of Risk in Community Banks, a series for the committed bank director. He holds his doctorate in economics and business from West Virginia University.

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