Pressure overlay (leading indicator)

A leading indicator is something that reliably moves before the thing you care about, giving early warning. The Cost Index runs a leading-indicator pressure overlay: signals that lead delivered cost — diesel is the clearest, leading freight — published as an inferred direction of pressure (up, down, or flat), never as a dollar price, and only after the signal's own live track record proves out.

Why it matters

It tells you which way cost is leaning before it lands on an invoice, without pretending to know the number. A leading signal like EIA diesel can warn that freight pressure is building — so a surcharge isn't a surprise — while the overlay stays honest about its limit: a direction, with a track record attached, and no dollar figure. It is the one part of the index that looks forward, and it is bounded hard.

Frequently asked

What is a leading indicator?

A leading indicator is something that reliably moves before the thing you actually care about, so it gives you early warning. For restaurant cost, the clearest example is diesel: it leads freight, and freight is a chunk of delivered cost, so a sustained move in diesel tends to show up on your invoices weeks later. A leading indicator tells you which way cost is leaning before it lands — it does not tell you the number.

Does the pressure overlay give a price?

No. The overlay publishes a direction of pressure — up, down, or flat — and never a dollar figure. That is the whole boundary: a leading signal like diesel can tell you delivered cost is leaning up before it lands on a bill, but it cannot tell you the number, so the overlay refuses to invent one. It is the one part of the Cost Index that looks forward, and it stays a direction.

How does a signal earn a place in the overlay?

It has to prove itself first. A signal only joins the overlay once its own live track record clears a hold-until-proven bar — a minimum number of calls, a minimum hit rate, and enough non-steady calls to be meaningful — and the recomputed direction has to match what is shown. A rule that has not earned its record yet does not get to speak, so the overlay is forward-looking without being a guess.

What is a leading indicator example?

Diesel is the clearest one for restaurant cost. It moves before freight, and freight is part of your delivered cost, so a sustained climb in diesel tends to show up on invoices weeks later. The Cost Index reads it as a direction of pressure — a heads-up that delivered cost is leaning up — never as a price, and only after the signal proves out.