Leading Indicators
Leading indicators are economic data points that can be used to predict future economic activity. They are used to anticipate changes in the economy before they occur, and can be used to make decisions about investments, production, and other economic activities. Leading indicators are typically released by government agencies, such as the Bureau of Labor Statistics, and can include data points such as unemployment, consumer confidence, and housing starts.
History of Leading Indicators
Leading indicators have been used since the early 20th century to predict economic activity. The first leading indicator was the Index of Industrial Production, which was developed by the National Bureau of Economic Research in the 1920s. Since then, leading indicators have been used to anticipate changes in the economy before they occur. In the 1950s, the Conference Board developed the Leading Economic Index, which is a composite of 10 leading indicators. This index is still used today to predict economic activity.
Comparison of Leading Indicators
| Indicator | Description |
|---|---|
| Unemployment | The number of people who are unemployed and actively seeking work. |
| Consumer Confidence | A measure of how confident consumers are in the economy. |
| Housing Starts | The number of new housing units that have been started. |
| GDP | Gross Domestic Product, a measure of the total output of goods and services in an economy. |
Summary
Leading indicators are economic data points that can be used to predict future economic activity. They have been used since the early 20th century to anticipate changes in the economy before they occur. Examples of leading indicators include unemployment, consumer confidence, and housing starts. For more information about leading indicators, visit the websites of the Bureau of Labor Statistics, the Conference Board, and the National Bureau of Economic Research.
See Also
- Economic Indicators
- Business Cycle
- Gross Domestic Product (GDP)
- Consumer Price Index (CPI)
- Employment Cost Index (ECI)
- Producer Price Index (PPI)
- Retail Sales
- Industrial Production
- Housing Starts
- Consumer Confidence
