leading economic indicator

(redirected from Lead Indicator)

Leading Economic Indicator

An indicator that occurs before an economy has started moving in a particular direction and is therefore used to predict the economy's movement. For example, a reduction in the average number of hours worked by manufacturing employees is considered a leading indicator because it usually precedes an economic slowdown or a recession. Among the indicators used by the Composite Index of Leading Indicators are the change in the money supply and the number of new building permits issued for residences. Leading economic indicators are used to help predict the direction of the economy; investors and businesses can use them to make their decisions accordingly.

leading economic indicator

An economic or a financial variable that tends to move ahead of and in the same direction as general economic activity. Compare lagging economic indicator. See also index of leading economic indicators.
References in periodicals archive ?
Key customers give the CFO an understanding of the viability of the business and are a lead indicator of potential problems and opportunities.