Three Major Economic Indicator

In this blog, we have made an attempt to brief about the primary and essential indicators to watch for during the market. An economic indicator in simple is a tool used to predict the future economic trends. The economic indicators are calculated at regular intervals of time to represent the economic performance of a country or a particular sector. These economic indicators surely will have a higher impact on the market movements and they become an inevitable tool for a trader to watch out during the live market.

The economic indicators are categorized into three types

1. Leading indicators
2. Lagging indicators
3. Coincident indicators

(1)Leading Economic Indicators:

The leading economic indicator generally signals the future events. The leading indicators have the prospective to forecast the direction in which the future economy is headed. They are subject to frequent changes ahead of the upcoming economic adjustments.

Some examples of leading indicators are stock market, manufacturing activities, inventory levels, retail sales, building permits, level of new business start-ups, etc.,.

(2)Lagging Economic Indicators:

The lagging economic indicators are contrary to the leading indicators. They signal the economic events that have occurred in the past. They don’t give us a perspective to know where the economy is headed instead they indicate the economic changes over a period of time and are helpful in identifying the long term trends.

Some examples of lagging indicators are Gross Domestic Products (GDP), income and wages, unemployment rate, Inflation rate as Consumer Price Index (CPI) and Wholesale Price Index (WPI), currency rates, interest rates, balance of trade, etc.,.

(3)Coincident Economic Indicators:

The coincident economic indicators are on par with the economic events. They occur at the same time of economic changes and are significant in reflecting the current economic scenario.

Source : https://www.globalmarketastro.com/blog/three-major-economic-indicator/