Building permits for housing reflect whether people are confident enough or willing to buy homes. New orders reveal how much demand there is for business and consumer goods. The consumer expectations index is derived from surveying consumers on the economic prospects they expect for their families and the U.S. in the next year and for the U.S. during the next five years. It's the only indicator that's based on expectations rather than statistics, which are based on what has actually happened. If vendors have a backlog because orders are coming in fast and furious, that tends to be a sign of a strong economy.
Stock prices reflect corporate profitability and performance and help determine investment.
If the interest-rate spread increases, it shows a loosening of federal policy, generally resulting in lower interest rates. And a healthy supply of money is, no surprise, good news. Asked whether information technology professionals should pay attention to any particular leading indicators more than others, McGuckin says it's important to look at the overall index, because no industry functions in a vacuum. Nonetheless, special indexes were also created for the manufacturing, financial services, labor and household sectors. But the Internet industry can't get away from fundamentals that drive the overall economy.