Economic indicators can be used to some vastness to foretell the concern cycle. There are three leading types of economic indicators that are used to forecast, degree and recite short-term fluctuations in the economy: Primary, coincident and lagging indicators.
Business Cycle
The matter cycle is a recurring example of contraction and expansion. A contraction occurs during periods of depression, whereas an expansion occurs when the economy is recovering.
Leading Indicators
Influential economic indicators are those that rise or fall in advance of remainder of the economy.As the economy passes through the different stages of the business cycle, the relative performance of different industry groups will probably vary. For instance, during a recession, the performance of manufacturers of durable goods (such as refrigerators and automobiles) will suffer because the purchase of these goods can be deferred until the economy recovers.
Lagging Indicators
Lagging economic indicators are indicators that rise or fall somewhat later than remainder of the economy. Some lagging indicators are the average duration of unemployment and the number of outstanding commercial/industrial loans.
Significance
Some examples of primary indicators are the customary weekly hours worked by Industry employees and initial claims for unemployment benefits.
