What are the three types of indicators
Answers
2. synthetic indicator
3. olfactory indicator
Leading:
Leading indicators help to predict what the economy will do in the future. Leading indicators are often the most useful for an investor. An example of a leading indicator would be hours worked per employee. If the hours are rising, firms should increase hiring some point in the future.
Lagging:
Lagging indicators confirm what leading indicators predict. Lagging numbers change a few months after the economy does. For example, the unemployment rate is a lagging indicator. Generally, the unemployment rate will fall after a few months of economic growth. If the leading indicator of hours worked is increasing, after a few months the lagging indicator of unemployment should fall.
Coincident:
Coincident indicators mirror what the data is saying. Coincident indicators are generally what is happening right now, for example, the jobs report. If a leading indicator is predicting future job gains, a lagging indicator is saying unemployment is falling, a coincident indicator will tell you the current employment number.
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