![]() Businesses study them to anticipate the effect of future economic conditions and then make strategic decisions regarding markets and revenue. Policy makers and central bankers use leading indicators when setting fiscal or monetary policy. Leading indicators must be measurable to be useful as predictors of where the economy may be headed. ![]() The choice ofNovember 1973 for the business cycle peak and March 1975 for the business cycle trough was ultimately based on judgmentally weighted evidence from the series displayed in figure 10.1. Lagging indicators are metrics that can confirm change rather than predict it. When trend adjusted, however, the nominal indicators commonly show signif icant declines that indicate their participation in growth cycles.Leading indicator examples include the Consumer Confidence Index, Purchasing Managers’ Index, initial jobless claims, and average hours worked.Different leading indicators vary in their accuracy and leading relationships, so it is wise to consult a range of leading indicators when planning for the future. ![]()
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