lagging indicator
Definition of lagging indicator
: an economic indicator (such as spending on new plants and equipment) that more often than not maintains an existent trend for some time after the state of the economy has turned onto an opposite trend —called also lagger
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Financial Definition of LAGGING INDICATOR
lagging indicator
What It Is
A lagging indicator is a financial gauge that becomes measurable only after an economic shift has taken place.
How It Works
There are certain economic indicators that rely on changes in productivity or economic growth. For this reason, lagging indicators do not lend themselves to forecasting. Examples of lagging indicators include company earnings and levels of unemployment.
Why It Matters
Analysts and economic policymakers measure lagging indicators to confirm or refute previous analyses and the effectiveness of policy directives.
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