Lagging Indicators vs. Leading Indicators

Economists have categorized statistical data into two types for decades.

**Lagging Indicators** — tell you what already happened. GDP growth rate, unemployment rate, corporate revenue. Accurate, authoritative, complete. But by the time the numbers confirm, the trend has long since formed.

**Leading Indicators** — signals that turn "before" the outcome occurs. Purchasing Managers' Index (PMI), new housing starts, consumer confidence index. Imperfect, noisy. But they give you time to react.

How important is this distinction? **The National Bureau of Economic Research (NBER) officially declares recessions an average of 6 to 12 months after they actually begin.** By the time they announce "we've entered a recession," it's already half over.

Your monthly report is your NBER.