Leading indicator

A leading indicator is a gauge that changes in advance of a new trend in the economic cycle. These indicators are closely watched by investors to see if they should alter their investment patterns. Examples of leading indicators are:

  • Average work week
  • Bond yields
  • Business failure rate
  • Business formation rate
  • Change in raw material prices
  • Change in the money supply
  • New housing starts
  • Number of jobless claims
  • Orders for durable goods
  • Orders for plant and equipment
  • Stock prices