Many techniques have been developed for predicting changes in economic activity. AIER relies on a system using statistical indicators. We have found that analysis of selected statistical series to be useful in forecasting reversals in business cycles just prior to or shortly after their occurrence and in forecasting continuations of trends.
The method behind using statistical indicators is to find economic series that consistently lead, coincide, or lag turns in business activity. The leading indicators can be used forecast turning points in the cycle. The coincident indicators define the turning points; the lagging indicators confirm cyclical turns in business activity.
In Part One , we described our 12 Leading Indicators. In this second installment of a four-part series created for the web, we describe our 6 Coincident and 6 Lagging Indicators. As with our Leading Indicators, all dollar-denominated series are adjusted for price inflation.
