Individual Stocks

Understanding Financial Markets

What are “lagging indicators”?

Lagging indicators are economic indicators that may capture what is or has been happening in an economy from a few months to a few quarters after a change occurred. For example, a corporation’s profit reporting, although made on a regular basis by publicly traded companies, may indicate success or trouble with practices or decisions made many months before, since it takes so much time for such strategy and tactics to run their full course. Such lagging indicators are important to understand if a company, sector, or economy as a whole is on the right, wrong, or steady track. The Conference Board also publishes an Index of Lagging Indicators that helps thousands of people in their quest to illuminate what may happen in the future.



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