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The Leading Indicators
Book

The Leading Indicators

A Short History of the Search for the Right Numbers

Zachary Karabell
Simon & Schuster, 2014

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Editorial Rating

8

Qualities

  • Background
  • Concrete Examples
  • For Beginners

Recommendation

Financier Zachary Karabell explains that people rely on the leading economic indicators for accurate information. But what do they convey? Where did they come from? Are the statistics keeping up as times change? Karabell offers mixed answers in this plain-English primer about the numbers that rule peoples’ and states’ economic lives. He covers their relevance, weaknesses and limits. For instance, he notes that trade statistics reflect only the end-stage manufacturing location, seriously distorting trade balances. Karabell also offers intriguing ideas for improving these crucial indicators.

Take-Aways

  • “All indicators…are simple numbers. That is the problem.”
  • In the 1930s, economic crisis and a proactive US government taking responsibility for unemployment made statistics necessary.
  • In 1936, FDR used national income figures to support the progress of his policies.

About the Author

Zachary Karabell heads global strategy at Envestnet. He’s president of River Twice Research and River Twice Capital Advisors, and the author of 12 books and a weekly column, “The Edgy Optimist.”

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