The OECD Composite Leading Indicator uses 100 as neutral. Values above 100 suggest expansion ahead; below 100 suggests contraction.
Formula
Score = (CLI - 100) / 3 × 100 (normalized to -100/+100 range)Methodology
The OECD Composite Leading Indicator (CLI) is designed to anticipate turning points in economic activity 6-9 months ahead.
The CLI aggregates several leading indicators: - Building permits - Stock prices - Money supply - Interest rate spread - Manufacturing orders - Consumer expectations
Index interpretation: - CLI = 100: Economy at long-term trend - CLI > 100: Expected expansion - CLI < 100: Expected contraction - CLI turning down from >100: Peak ahead - CLI turning up from <100: Trough ahead
The OECD designs the CLI to have roughly balanced leads across different business cycles. It's particularly useful for identifying the direction of change rather than the level of activity.
Historical performance: The CLI has successfully signaled major turning points including the 2008 recession and 2020 pandemic shock.
How to Interpret
| Range | Label | Meaning |
|---|---|---|
| ≥ 102 | Strong Expansion | Well above trend - robust growth expected |
| 100 to 102 | Expansion | Above trend - continued growth expected |
| 98 to 100 | Slowing | Below trend - growth moderating |
| < 98 | Contraction Risk | Well below trend - economic weakness expected |
Data Source
OECD Economic Outlook database via FRED (USALOLITONOSTSAM).
Reference
OECD (2024). OECD Composite Leading Indicators. OECD Economic Outlook
View sourceRelated Metrics
Check Market Sentiment
See how current market sentiment affects your portfolio holdings.
For Educational Purposes Only
This analysis is not investment advice. Results are based on simplified models using historical data. Past performance does not guarantee future results. All investments carry risk of loss. Consult a qualified financial advisor before making investment decisions.