That, combined with the OECD
composite index of leading indicators released last week, which showed no change on the month for the fourth month running, suggests that the economy is stabilising following its lengthy adjustment to slower growth.
According to the OECD's
composite index of leading indicators slowing and weak growth is set to persist in the coming quarters in most leading economies.
The
composite index of leading indicators rose 3.8 points to 103.2, the biggest increase since 1980 when comparable data became available, the Cabinet Office said in a preliminary report.
This paper addresses two questions concerning the forecasting performance of the
Composite Index of Leading Indicators (CLI) in predicting the cyclical turning points of the economy.
The January decline, the fourth in a row, follows on the heels of a steep decline in business executives' confidence, and a drop in the
composite index of leading indicators, a broad-range measure of economic performance.
More precisely, if [P.sub.t] denotes the probability that the
composite index of leading indicators is in its contraction phase at time t, then (1) [P.sub.t] = [[P.sub.t-1] + PL(1 - [P.sub.t-1])] F[d.sub.t]/{[[P.sub.t-1] + PL(1 - [P.sub.t-1])] F[d.sub.t] + (1 - [P.sub.t-1])(1 - PL) F[u.sub.t]}.
composite index of leading indicators include only 1--the deflated money supply.
Koenig and Emery (1991) have examined the historical performance of the
composite index of leading indicators (CLI) as a predictor of cyclical turning points in economic activity.
BEA's
composite index of leading indicators increased 0.2 percent in April; the contributions of the individual components to the change in the index are shown in table 1.