Leading economic indicators.

Data series that tend to turn before the wider economy does, used to get an early read on where growth is heading.

Drafted with AI assistance. Not yet reviewed by a person · Last updated August 23, 2026

In plain English

Leading indicators include building permits, new orders for manufactured goods, initial jobless claims, and the shape of the yield curve, each of which historically moves ahead of output. They are often bundled into a composite index so one series does not dominate. Coincident indicators, such as payroll employment, move with the economy, and lagging indicators, such as the unemployment rate, confirm a turn after it happens. Leading indicators give false signals regularly, so no single reading settles anything. The value is in the direction of the group over several months.

Most useful ages

20 to 70

01Why it matters

These are the numbers that move markets and shape hiring plans months before a slowdown shows up in the jobs report, which is why the same data gets discussed long before most people feel any change.

02The math, step by step

Say a composite of ten leading series falls for six straight months, from an index level of 105 to 99. That is a decline of 6 index points, or about 5.7 percent, and it is the kind of persistent drop analysts treat as a warning rather than noise.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

Do not confuse with A forecast that a recession is coming

An indicator is a measurement, not a forecast. Leading series often turn down without a recession following, and they occasionally miss one entirely. They narrow the range of what is likely; they do not call the outcome.