leading indicators


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Related to leading indicators: Coincident indicators, Lagging indicators, Leading economic indicators

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 indicators

the statistical time series that past experience has shown tends to reflect later changes, and which thus can be used to forecast these changes because they precede the changes in a consistent manner and by a relatively constant time interval. For example, current birth statistics would provide a firm basis for predicting primary school admissions five or six years ahead. Leading indicators like orders for new machine tools, overtime/short-time working in manufacturing and housebuilding starts are frequently used for SALES FORECASTING.
References in periodicals archive ?
Campbell Institute members have world class safety systems, so their insight regarding leading indicators is invaluable as we endeavor to make workplaces everywhere safer.
However, seven of the eight components that make up New Hampshire's Leading Indicator had a positive contribution in May: unemployment claims, building permits, exports, consumer expectations (regional), stock prices (national), interest rate spread and technology index (national).
For the same reason, fewer employers have implemented safety incentive programs based exclusively on leading indicators, as it is much more difficult to identify leading indicators and administer those programs.
Instead, I try to pick just three to five data points that move left to right on the chart so that I can create a series of leading indicators for my business.
During the Bloomberg interview, its CEO highlighted several aspects which convince him and his team that their leading indicators are correct in calling a recession.
Among the leading indicators, moves in stock prices were weak, apparently because investors were risk-averse amid uncertainties over the eurozone debt crisis, the official said.
The six-month annualized rate of change for the composite index of leading indicators stood at 6.
The Paris-based forecaster said its leading indicator measure for the UK rose by 0.
Leading indicators are basically business measurements," says Donna Rhodes, a principal researcher for the Lean Aerospace Initiative (LAI) at MIT and co-head of the leading indicators project.
In this connection, note that the Conference Board, which added the yield curve spread to its index of leading indicators in 1996, announced in June 2005 that it will adjust its procedures so as to focus on the level and not on the change.
Since the unemployment rate is a lagging indicator (a variable used to confirm that a stage of the economic cycle has already occurred), the employment picture won't brighten until more of the forward-looking leading indicators (such as housing starts or durable goods orders) improve.