Washington Area Leading Index of Economic Indicators

A key feature of the Leading Index is its ability to signal a change in the direction of the economy's growth.  The index is a composite of five components that tend to anticipate changes in the business cycle. 
These are:  Residential Building Permits; Consumer Expectations; Initial Claims For Unemployment Insurance; Help Wanted Advertising; and
Estimated Retail Sales of Durable Goods.

The chart displaying the Historical Series includes a 12-month moving average.  The moving average helps you to interpret changes in the index. 
If the index is consistently above its moving average, the economy is
likely to enter an expansionary mode.  On the other hand, if the index
is consistently below its moving average, the economy is likely to enter a period of contraction.

As the historical series at the right shows, the Washington PMSA experienced a recession beginning in July 1990 and ending in May 1992.  The Leading Index peaked in November 1988 and then began to decline providing an advanced warning that the Washington Area's economy was likely to slowdown in the coming months.  The start date of the recession was July 1990--eight months after the peak of the Leading Index.

Components of the Leading Index

Most Recent Six Months

Percent Change From Same Month Of Previous Year

Historical Series