Economic Indicators are statistical data on the performance of the
economy; they can be extremely helpful in predicting the direction of
stock prices and the economy.
Lagging Indicators reflect the economy’s historical performance and
changes are only identified after an economic trend or pattern has been
already established. Historical data my not accurately predict future
stock prices. However, the changing data trends, over time, are
important to understand. The direction of the changes in lagging
indicators can help predict future economic levels and stock prices.
Leading Indicators often change prior to large economic adjustments, and
as such can be used to predict future trends. Leading economic
indicators predict the next phase of the business cycle.