Macroeconomic Indicators

Overview

Macroeconomic indicators measure aggregate economic performance. They divide into leading (predict future), coincident (reflect current), and lagging (confirm past) indicators. Understanding these helps contextualize business decisions within the broader economic environment.

Framework

IRON LAW: Leading, Coincident, or Lagging — Know Which Type

GDP growth is LAGGING — by the time it's published, the economy has already
changed. Stock markets and PMI are LEADING — they predict future direction.
Unemployment is LAGGING — it rises after a recession starts.

Using a lagging indicator to predict the future is looking in the rearview mirror.
Match the indicator type to your analysis purpose.