Business, Legal & Accounting Glossary
An economic indicator that changes after the overall economy has changed; examples include labor costs, business spending, the unemployment rate, the prime rate, outstanding bank loans, and inventory book value.
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.
You need to try and follow your lagging indicator and see what the best way to adapt to it is.
When the cost of producing the high-quality staplers rose from $2.00 to $3.00, Joe knew this was a lagging indicator that the demand for materials had increased substantially.
A lagging indicator can be regarded as any type of economic factor which may have a negative impact on the financial stasis of banks, states, federal, or even private organizations.
prime
leading indicator
coincident indicator
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Lagging Indicator are sourced/syndicated and enhanced from:
This glossary post was last updated: 5th November, 2021 | 0 Views.