Is the New LEI Better than the Old One?

The Conference Board has comprehensively revised the Leading Economic Index (LEI) for the United States. The LEI is considered one predictor of recession, leading to the question of whether the new LEI has more predictive power than the old one.

The recession probability model based on the new Leading Economic Index successfully predicts all recessions since 1979, but it has more false-positives compared to our original model, which uses the old LEI.

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