Knowledge Tree
Composite Leading Indicator
Also known as: CLI, Composite Leading Indicators
Facts (15)
Sources
Mapping Asset Returns to Economic Regimes: A Practical Investor's ... insight.factset.com Sep 9, 2025 15 facts
claimThe empirical regime model, which uses CLI growth and inflation-momentum (ITS) signals, aligns with historical economic regimes from 1958 to 2025.
procedureThe growth signal in the FactSet economic regime model is derived from the monthly percentage change in the U.S. OECD Composite Leading Indicator (CLI).
referenceA detailed review and description of the construction and methodology for Composite Leading Indicators (CLI) is provided by the OECD.
claimA 'Stagflation' regime, characterized by a falling Composite Leading Indicator (CLI) and rising Inflation-Trend Signal (ITS), reflects weak demand growth combined with negative supply shocks and is historically challenging for most asset classes, including safe government bonds.
claimA falling Composite Leading Indicator (CLI) and falling Inflation-Momentum (ITS) signal a demand-driven recession, during which defensive assets like government bonds typically perform best.
claimA 'Heating' regime, characterized by a rising Composite Leading Indicator (CLI) and rising Inflation-Trend Signal (ITS), suggests economic expansion based on demand outpacing supply, which is expected to favor cyclical and risky assets like commodities and emerging market equities.
perspectiveIn the FactSet economic regime model, the 'Stagflation' regime (falling CLI and rising ITS) reflects weak demand growth combined with negative supply shocks, which is historically challenging for most asset classes, including safe government bonds.
claimA 'Growing' regime, characterized by a rising Composite Leading Indicator (CLI) and falling Inflation-Trend Signal (ITS), indicates non-inflationary growth where rising demand accommodates positive supply shocks, a scenario that supports both equities and bonds.
claimThe U.S. Composite Leading Indicator (CLI) indicates shifts in expected economic activity by capturing movements in aggregate demand through indicators such as net new orders of durable goods, consumer confidence surveys, financial market prices, and interest rate spreads.
claimThe regime model relies on two macro signals: the Composite Leading Indicator (CLI) and inflation momentum.
claimThe time period used in the FactSet analysis represents the longest common history period for which both Composite Leading Indicator (CLI) and Consumer Price Index (CPI) factors have available time series data.
perspectiveIn the FactSet economic regime model, the 'Heating' regime (rising CLI and rising ITS) suggests economic expansion driven by demand outpacing supply, which is expected to favor cyclical and risky assets like commodities and emerging market equities.
perspectiveIn the FactSet economic regime model, the 'Growing' regime (rising CLI and falling ITS) indicates non-inflationary growth where rising demand accommodates positive supply shocks, a scenario that supports both equities and bonds.
claimThe empirical regime model, which utilizes Composite Leading Indicator (CLI) growth and inflation-momentum (ITS) signals, correctly maps to historical macro episodes from 1958 to 2025.
claimIn the context of the FactSet article, the term 'Stagflation' indicates any economic environment characterized by a slowing Composite Leading Indicator (CLI) and a rising Consumer Price Index (CPI), without specifying the magnitude of these changes or implying a dire economic environment.