Identifying Forecasting Tools in Economic Analysis

In economic analysis, portfolio managers often utilize various forecasting tools to predict market trends and economic conditions. One widely-used forecasting tool is the Leading Economic Indicator (LEI). The LEI includes components such as stock market performance, manufacturing activity, and new orders for consumer goods.

As an analyst tasked with advising your clients on macroeconomic conditions, you are evaluating the effectiveness of different forecasting methods. You come across three tools commonly referenced in economic forecasting.

Which of the following tools is primarily used to predict the direction of the economy based on its current state and is considered a critical component of economic analysis?