Wisconsin Department of Workforce Development

This page is one of three companion pages to the Wisconsin Economic Indicators, providing definitions for each of the data series.

L = leading indicators

Leading indicators, of which there are six units, tell about economic activities that change pace before shifts of the economy as a whole.

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Composite Index of Leading Indicators - L1

The composite index combines several leading indicators into a single number. The index number combines the values of five series, making it a more reliable indicator than a single indicator.

In the composite index, data for the year 1994 is set equal to one-hundred points. Readings above one-hundred indicate economic prospects that are better than the outlook during the base year of 1994.

The specific indicator series comprising the composite index can be changed, but a change of series will change the index numbers.

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Average Work Week -L2

This is an average of the number of hours production workers in manufacturing industries worked during the week of the survey, which is the week containing the twelfth day of the month. Average work week is not an average of the number of hours worked each week during a month. The average hours worked usually increase as the economy begins recovering from a recession. Until the recovery is well established, employers prefer paying an "overtime premium" over hiring new workers. These data come from an employer survey done by the Current Employment Statistics (CES) program in the Department of Workforce Development.

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Average Overtime Hours - L3

The overtime figure is an average for production workers in manufacturing industries. Like the average work week, the average overtime hours per week tends to increase with recovery from recession. These data come from an employer survey done by the Current Employment Statistics (CES) program in the Department of Workforce Development.

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Average Weekly Initial Claims for Unemployment Compensation - L4

The number of people who file an initial claim for unemployment compensation is a very reliable indicator of economic trends in the near future. Well over ninety percent of Wisconsin's wage and salary jobs are covered by U.C. The number includes only "initial" or first-time claims made upon layoff of workers, thus representing recent employment adjustments by employers in response to economic conditions. The source of the initial claims average is DWD's Unemployment Compensation Division.

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Total Job Openings Received - L5

This is the monthly number of jobs available from employers who hire through public Job Service offices and Job Centers throughout the state. While many employers rely on other recruitment methods, those who do depend on DWD make this an indicator of economic conditions. The data are estimates derived from the number of job orders placed by employers with the Department of Workforce Development

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New Business Incorporations - L6

This is the monthly count of business entities that file for incorporation with Wisconsin's Secretary of State. Because it does not include sole proprietor and partnership businesses, it is not a total of new business formation. This indicator tends to have a much longer "lead time" than the other leading indicators and so it is given less weight in the composite index.

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