Definition
Data that tends to change direction before the overall economy does, used to anticipate turns in the cycle.
The story
Examples include new orders at factories, building permits, jobless claims and the yield curve. The Conference Board rolls 10 of them into a monthly Leading Economic Index (LEI). Lagging indicators, like the unemployment rate, confirm a turn after it's happened.
Why markets watch it
Investors watch leading indicators for early warning of a slowdown, though they sometimes flash false alarms.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms