Lagging Indicators

Lagging indicators mean economic data that change after the broader economy has already started moving. In simple terms, lagging indicators confirm what has already been happening. Lagging indicators are important because they help verify economic trends, but they may not give early warnings. Unemployment rate and corporate profits can sometimes behave as lagging indicators. For example, unemployment may continue rising even after a recession has already started or after recovery has begun. Lagging indicators are not useless. They can confirm the strength or weakness of an economic trend.