Amid two years of sometimes deep contraction, the LEI never really did improve very much, falling a deeper-than-expected 0.4 percent in January with December, which had toyed with the breakeven line at an initial minus 0.1 percent, revised lower to minus 0.2 percent. A drop in manufacturing hours and a still negative yield spread were two key causes of January's decline.

However, the report notes that for the first time in two years the breadth of components in January, six of ten, were positive contributors in the month. This is enough for the Conference Board, which publishes this report, to declare that the LEI is no longer signalling recession. Nevertheless, the Conference Board does expect US GDP to slow to near zero in the second and third quarters this year.

Down by only 0.1 percent in December which was the smallest decrease in more than a year, the index of leading economic indicators in January nevertheless is expected to extend its long streak of decline, down a consensus 0.3 percent.

The index of leading economic indicators is a composite of 10 forward-looking components including building permits, new factory orders, and unemployment claims. The report attempts to predict general economic conditions six months out.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the index of leading indicators, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly -- and causing potential inflationary pressures. The index of leading indicators is designed to predict turning points in the economy -- such as recessions and recoveries. More specifically, it was designed to lead the index of coincident indicators, also now published by The Conference Board. Investors like to see composite indexes because they tell an easy story, although they are not always as useful as they promise. The majority of the components of the leading indicators have been reported earlier in the month so that the composite index doesn't necessarily reveal new information about the economy. Bond investors tend to be less interested in this index than equity investors. Also, the non-financial media tends to give this index more press than it deserves.