A leading indicator is a measure that usually :

Economists typically group macroeconomic statistics under one of three headings: leading, lagging or coincident. Figuratively speaking, one views them through the windshield, the rearview mirror, or the side window. But how can an investor determine the direction of the economy in this blizzard of data?

Coincident and lagging indicators provide investors with some confirmation of where we are and where we've been, but here we'll take a look at the leading economic indicators. They're a good place to start, because they help us understand where the economy is heading.

Market IndexesIn order for an economic indicator to have predictive value for investors, it must be current, it must be forward-looking and it must discount current values according to future expectations. Meaningful statistics about the direction of the economy start with the major market indexes and the information they provide about:

• Stock and stock futures markets
• Bond and mortgage interest rates, and the yield curve
• Foreign exchange rates
• Commodity prices, especially gold, grains, oil and metals

Although these measures are crucial to investors, they aren't generally regarded as economic indicators per se. This is because they don't look very far into the future - a few weeks or months at most. Charting the history of indexes over time puts them in context and gives them meaning. For instance, it is not terribly useful to know that it costs $2 to purchase one British pound, but it may be useful to know that the pound is trading at a five-year high against the dollar.

Index of Leading Economic Indicators Ironically, the Conference Board's Index of Leading Economic Indicators (LEI) really isn't leading data. Upon release, the data is almost two months old, and most of the10 component reports have been released prior to the LEI itself. It purports not to signal a change in market direction until the index has moved in the same direction, up or down, for three consecutive months, which it rarely does. It is widely viewed as a better harbinger of recession than expansion. However, it has predicted a number of recessions that did not occur, having once prompted American economist Paul Samuelson to suggest that "economists have correctly predicted nine of the last five recessions."

Weekly Data The Jobless Claims Report, is a report released weekly by the Department of Labor. In a weakening economy, unemployment filings will trend upward. They are generally analyzed as a four-week moving average (MA), in order to smooth week-to-week variance. However, this report has a built-in bias in that self-employed persons, part-timers and contract employees who lose their jobs don't qualify for benefits and thus are not counted.

Money supply, an abstract, technical calculation of how much money is sloshing around in the economy is released by the Federal Reserve. An upward trend suggests inflation. However, in a digital world in which vast sums of money can be transmitted across the globe in an instant, this indicator has lost much of its importance over the last decade.

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1. A leading indicator is a measure that usually The correct answer was: c. changes in the same direction as the general economy before the general economy changes.. changes in the same direction as the general economy before the general economy changes. 

A measurable economic factor that changes before the economy starts to follow a particular pattern or trend.Leading indicators are indicators that usually, but not always, change before the economy as a whole changes