Leading Indicator

Any quantifiable or observable variable of interest that foretells a change or movement in another data series, process, trend, or other event of interest before it occurs.. Market watchers and policymakers can predict important changes in the economy with the aid of leading economic indicators, which are used to forecast changes before the rest of the economy starts to move in that direction. Leading indicators can be helpful in predicting the onset, scope, and course of future business and economic conditions. A lagging indicator and a leading indicator can be compared. The five main leading indicators are the Treasury yield curve, durable goods orders, stock market major indices, manufacturing jobs and building permits.