The Economy & the Fed
Leading, Coincident and Lagging Indicators
Economic data falls into three groups by timing. Leading indicators tend to change before the economy turns, so they hint at what is coming: building permits, new manufacturing orders, the stock market and the yield curve. Coincident indicators move at the same time as the economy: payrolls, industrial production and personal income. Lagging indicators change after the economy has already turned and confirm a trend: inflation measures such as CPI, the unemployment rate, and business loan totals. Knowing which group a report belongs to is a standard exam question.
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