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A lagging indicator is an economic statistic that changes after macroeconomic conditions have already changed. The lagging indicator is contrasted with the coincident indicator which changes with economic conditions, and the leading indicator, which changes in advance of expected economic trends. Statistical time series analysis is used to categorize a macroeconomic variable as a lagging indicator. For instance, the number of new unemployment claims is recognized as a lagging indicator. Other lagging indicator examples include the CPI for services, the prime rate, and the average unemployment duration. A lagging indicator index can establish a composite view of multiple lagging indicator variables. The Conference Board and ECRI are two organizations that publish a lagging indicator index for the US. The lagging indicator index is most useful for confirming the timing of previously identified economic trends. |
