Leading indicators

Indicators that provide early indications of later changes. For example leading economic indicators might include consumer sentiment, applications for unemployment compensation, various indexes, or earnings reports. Rate of inflation, industrial production, bankruptcies, Gross Domestic Product, retail sales, stock market prices, and money supply changes can all be leading indicators of future economic conditions. Leading indicators are those used to indicate future changes, but there are also coincident indicators that indicate simultaneous economic changes and lagging indicators that occur after the economic change has occurred. The time difference between a change in the indicator and the economic activity with which it is associated is called lead time or lag time. An indicator may move in the same or opposite direction as the general economic activity.