lagging indicator


Lagging Indicator

Statistics of economic performance that follow other indicators. Lagging indicators are used to confirm a previous economic trend. For example, an increase in job creation and a fall in the unemployment rate are considered lagging indicators of economic recovery. That is, they occur after other indicators of recovery, such as GDP growth. As such, job creation and lower unemployment show that the GDP growth has been, and will likely continue to be, sustained. See also: Leading indicator, Coincident indicator.

lagging indicator

a run of statistical data that past experience has shown tends to reflect earlier changes in some related area of the economy and can thus be forecast from information about these changes because they follow the changes in a consistent manner and by a relatively constant time interval. For example, unemployment and company bankruptcies’ statistics both tend to change after a lag as a result of changes in economic activity as measured by changes in GROSS NATIONAL PRODUCT and thus can be forecast from changes in GNP See LEADING INDICATOR, FORECASTING, TIME-SERIES ANALYSIS.