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Leading Indicator

What is a leading indicator?

A leading indicator is a forward-looking qualitative or quantitative metric that can help analysts or investors predict future market movements or business trends.

Leading indicators can signal economic change and may be used to make predictions about the direction of the economy. With investing, leading indicators can be used to uncover investment opportunities related to changes in market or economic conditions.

Examples include the index of consumer confidence, purchasing managers' index, and initial jobless claims.