lagging indicators investment & finance definition

One of three composite indices published monthly by the Conference Board (an international, independent organization that creates and distributes information about management and the marketplace) around the 20th day of every month in the Index of Leading Economic Indicators. These indices comprise an analytical system that is designed to signal peaks and troughs in the business cycle. The other two composite indices are the leading indicators and the coincident index.

The lagging indicators index is comprised of economic statistics that reflect economic activity after it has occurred. The seven lagging indicators are unemployment, unit labor costs for manufacturing, the average prime rate charged by banks, the ratio of manufacturing and trade inventories to sales, commercial and industrial loans, the ratio of consumer installment credit to personal income rate, and the consumer price index for services. Traders and analysts pay attention to the indices to determine whether the U.S. economy is doing well or is slowing down. See also leading indicators.