Business Cycle Indicators - BCI

You’ve heard of the Consumer Price Index and other economic indicators such as consumer confidence, factory orders, and new housing permits. These are all business cycle indicators (BCI).

But who bothers to collect all this information?

An organization called the Conference Board is a not-for-profit research organization that has 1,200 members in 60 countries. They gather data from both private and public companies, as well as the government, and then publish leading indicators (consumer expectations, stock prices, interest rate spread) and lagging indicators (average length of unemployment, average prime rate, consumer price index, commercial lending activity) to forecast changes in the direction of the overall economy.

By studying the peaks and valleys of the past, they try to predict when the next recession will hit or when the next boom will happen in the stock market.