Lagging economic indicators
Why do they matter?
A lagging indicator is an economic statistical measure that changes after macroeconomic conditions have already shifted. These indicators confirm long-term economic trends rather than predicting them, providing a retrospective view of economic performance. They provide valuable insights into the economy's historical performance and help identify changes that have already occurred.
Key Characteristics
Reflect past economic conditions
Change after macroeconomic shifts have taken place
Confirm trends rather than forecast them
Useful for verifying economic changes and long-term patterns
Common Lagging Indicators
Consumer Price Index (CPI) - Tracks inflation trends after they occur.
Unemployment Rate - Reflects changes in employment levels after economic shifts.
Gross Domestic Product (GDP) - Reflects the overall economic output retrospectively.
Corporate Profits - Indicates business performance following economic changes.
Labor Cost Per Unit of Output - Measures changes in labor efficiency and costs.