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Economic Commentary

Forecasting Turning Points With Leading Indicators

The financial news media frequently point to the movement of the Composite Index of Leading Indicators (ILl) as proof of impending growth or contraction in economic activity. A closer look indicates, however, that while the ILl can provide a great deal of useful information, its value as a forecasting tool is limited. Its usefulness increases when it is used in cornbination with other indexes.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Anderson, Gerald, and John Erceg. 1989. “Forecasting Turning Points With Leading Indicators.” Federal Reserve Bank of Cleveland, Economic Commentary 10/1/1989.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International