OK, let's get one thing straight... Delinquencies on credit cards (or other loans) are not a leading indicator. The ISM is not a leading indicator. The PMI is not a leading indicator. Heavy truck sales are not a leading indicator. Job openings are not a leading indicator. Consumer confidence is not a leading indicator. Small business confidence is not a leading indicator. Durable goods orders are not a leading indicator. Capital goods orders are not a leading indicator. Unemployment claims are not a leading indicator. Nonfarm payrolls are not a leading indicator. The unemployment rate is not a leading indicator. Retail sales are not a leading indicator. Port traffic is not a leading indicator. Rail traffic is not a leading indicator. Freight traffic is not a leading indicator. Rig count is not a leading indicator. Bank lending is not a leading indicator. The Conference Board Leading Economic Indicator (LEI) is not a leading indicator (I know that sounds crazy, but it's not true...). All of these indicators are, at best, coincident, and some even lag. But not all coincident economic data is created equal. Some start to show up at cycle turns. Our GMI U.S. Coincident Business Cycle Index incorporates some of the more forward-looking elements of the coincident economic data, including the early employment trends I mentioned earlier, as well as other signals that tend to lead. But more importantly, everything is influenced by changes in financial conditions... Here's the background: Our leading indicator bottomed in June 2022, about nine months ahead of the ISM and our coincident index. By March 2023, a full nine months later, the ISM and our GMI also bottomed and began to rise. The lagging data, particularly the unemployment rate, continued to rise, which is why the Fed continues to monitor it. Most people believe that rising unemployment is always bearish for risk assets. But it all depends on the cyclical context and the direction of the leading indicators... and they are rising. The bottom line? The labor market is doing its part to lower interest rates, which will ultimately feed through to interest-rate-sensitive sectors of the economy, such as housing and manufacturing, driving the next round of the business cycle higher. It's a recursive feedback loop. Once you understand the "Dominoes of Everything Code," the whole thing starts to click. You'll see how it all fits together, and you'll understand the phases of the cycle and the various leading and lagging factors. Start here.