About

Our Mission:

The Consumer Metrics Institute was founded on a simple observation: many 'leading' economic indicators are published, but few (if any) are sufficiently 'leading' to be meaningful to investors. In fact, many 'leading' indicators use the prior month's equity market results as a key component of their indexes. Investors may find their last month-end account statement more timely.

To remedy this, the Consumer Metrics Institute has developed (and is continuing to develop) techniques for monitoring 'up-stream' economic activities on a daily basis.

Our Vision:

Charles Dow (a co-founder of Dow Jones and Company) is often credited with the modern concept of an index that increases or decreases in advance of similar changes in economic activity. Dow noticed that in his era railroad shipments tended to increase or decline ahead of the reported results of the manufacturing firms that made the products being shipped. He theorized that railroads, being in the upstream part of the consumer economy, would respond first to changes in the economy's overall health. His Transportation Index became a sort of 'canary in the cage' for the U.S. economy.

The 'Consumer Leading Indicators' we provide are much more timely than most other leading indicators, and they tightly focus on the U.S. consumer, which is the driving force behind 70% of the U.S. economy's activity. The increased timeliness is the result of two major improvements over other leading indicators:

First, we have taken Charles Dow's ideas to heart and we have moved as far 'up-stream' economically as possible - to the point where a consumer is actually making the initial purchase decisions for major durable goods. Our information is captured in some cases while the transaction is still being processed - before the retailer (let alone the wholesaler or manufacturer) is fully aware of the cash flows being generated.

Secondly, we capture that data daily and publish the day-to-day results several times per week, unlike the monthly publication of monthly numbers typical of most other leading indicators. Additionally, we publish daily indexes for a number of separate sectors of the U.S. economy (e.g., our Automotive Index), and still more weekly sub-indexes of selected segments within those sectors (e.g., Domestic Autos or Luxury Autos).

We also differ from other indicators because our focus is exclusively on major discretionary spending of the U.S. consumer. This is the largest and most volatile portion of the U.S. economy, and the initiating force behind growth and contraction cycles. Other leading indicators heavily weight manufacturing data into their 'leading' indicators - activities which, from our perspective, are months or quarters 'down-stream'.


Our History:

The daily consumer sampling process commenced in 2004, and several years of data were required to refine the process and statistically analyze how the timing of our indexes related to other 'leading' indicators, including the equity markets. The 2008-2009 economic recession provided a final validation of the methodologies and confirmed a multi-month lead relative to other commonly referenced indicators. Additionally, the 2008-2009 event was significant enough to verify whether our trailing percentiles adequately reflected the severity of the downturn. By the summer of 2009 we were ready to release the first results of our ongoing research.

Our Methodology:

The Consumer Leading Indicators on our web site track consumer interest in major discretionary purchases. These typically include such items as automobiles, housing, vacations, durable household goods and investments. Not included would be expenditures that are more or less automatic, relatively minor and/or non-discretionary, such as groceries, fuel or utilities.

We conduct samplings of consumer interest in making purchases within each of our defined sectors on a daily basis. Our analytical methodologies have been developed and refined over time, and they remain the proprietary core of our business. To protect both the integrity of our methodologies and the security of our data it is necessary that we keep the precise details of our sampling process confidential.

It is important, however, to note both the immediacy of our results and their scope. We sample consumer activities across the entire U.S. economy, sampling activities in all 50 states. Our data is collected daily, and is generally available in the form of updated indices within several days of the sampling period.

These indexes and percentiles are updated several times per week and are available free of charge on the Consumer Leading Indicators web site: http://www.consumerindexes.com. Complete historical tables of the indexes are also provided for download by members of the Consumer Metrics Institute (membership information is available on the web site).