Leading index → GDP growth

Common explanation (Knock-on · same direction): The leading index combines short-term series that turn before the economy does, so its turning points usually come a few months before GDP’s (the OECD aims for a 6⁠–⁠9 month lead).

One of the two has no data yet for this issue.

Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.

Where it stands now

Where the two indicators stand this issue

Leading index: Now 100.14. GDP growth: Median position across economies 62.

Tests

Does this link hold up?

Common explanationThe leading index combines short-term series that turn before the economy does, so its turning points usually come a few months before GDP’s (the OECD aims for a 6⁠–⁠9 month lead)Source: OECD, “Composite Leading Indicators Frequently Asked Questions (FAQs)” (2024).
Tested against our dataAgreement between the positions of Leading index and GDP growth (6-month lag), measured in the direction of the common explanation: +0.39. Looking at every 5-year period (shifted one year at a time), the two moved in that direction in all 11, but that does not mean they always will. Weak or inconsistent
Periods when it did not holdAcross 11 5-year periods, out of step in none.

History

The two lines, overlaid

Data: Organisation for Economic Co-operation and Development (OECD), Composite Leading Indicators; OECD Quarterly National Accounts; Taiwan: Directorate-General of Budget, Accounting and Statistics (DGBAS), Executive Yuan. Positions: our calculation.

Leading indexGDP growth

Limits

What this card cannot tell you

Moving together does not prove that one causes the other.
Links change over time; periods when this one did not hold are listed in full.
This is the historical record, not a forecast.

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