Key Figures Behind Business Cycle Indicators

Wesley Clair Mitchell (1874-1948)

An American economist trained at Chicago who devoted his career to the empirical study of business fluctuations. His Business Cycles (1913) and the later Business Cycles: The Problem and Its Setting (1927) established the idea that cycles are a recurrent, describable phenomenon with an identifiable anatomy. Mitchell founded the National Bureau of Economic Research in 1920 and served as its director of research for a quarter century, building the institution that still dates American recessions. His methodological conviction — that economists should establish the facts before theorizing about them — was influential and controversial in roughly equal measure, and the indicator framework is its most durable product.

Arthur F. Burns (1904-1987)

Mitchell's student and collaborator, co-author of Measuring Business Cycles (1946) and of the 1938 study that first identified indicators of cyclical revival for the Treasury. Burns later succeeded Mitchell in leading the NBER's research program, chaired the Council of Economic Advisers under President Eisenhower, and served as Chairman of the Federal Reserve from 1970 to 1978 — an unusual career arc from statistical researcher to the most powerful monetary policy job in the world. His tenure at the Fed coincided with the acceleration of inflation in the 1970s and remains heavily debated. The screening criteria he and Mitchell applied to candidate indicators are still the standard.

Geoffrey H. Moore (1914-2000)

Frequently called the father of leading economic indicators. Moore worked at the NBER from the 1930s, refined the indicator lists, and developed the composite index method that combines several series into one smoother measure — the form in which leading indicators are actually used. He served as Commissioner of the Bureau of Labor Statistics in the late 1960s and early 1970s and afterward founded the Center for International Business Cycle Research, first at Rutgers and then at Columbia, extending indicator analysis to other countries and building international cycle chronologies. Moore also served on the NBER's Business Cycle Dating Committee. Much of what appears each month as an index of leading indicators traces directly to his methodology.

Julius Shiskin (1912-1978)

A statistician whose contribution to indicator analysis was making the data usable. Working at the Census Bureau, Shiskin developed the X-11 seasonal adjustment program, which strips predictable within-year patterns out of economic series — an essential step, because unadjusted series are dominated by seasonal swings that hide cyclical turns. He collaborated with Moore on the composite indicator work and helped launch the Commerce Department's monthly indicator publication in the early 1960s. Shiskin went on to be Chief Statistician at the Office of Management and Budget and Commissioner of the Bureau of Labor Statistics from 1973. His 1974 rules of thumb for spotting a recession are the origin of the widespread but unofficial two-quarter rule.

Victor Zarnowitz (1919-2009)

A Polish-born economist who became one of the leading authorities on business cycle measurement and on the accuracy of economic forecasting. Working at the NBER and the University of Chicago, and later as an economic counsellor at The Conference Board, Zarnowitz studied how well indicators and forecasters actually performed rather than assuming they performed well — documenting systematic tendencies to miss turning points and to revise too slowly. His Business Cycles: Theory, History, Indicators, and Forecasting (1992) is a standard reference. He served on the NBER's Business Cycle Dating Committee and did much to keep the indicator tradition honest about its own limitations.