Economic indicator

A measurement of economic activity, published on a stated schedule by a statistical agency, a central bank or a survey organisation. Some are counts of what happened, gathered from tax records, payrolls or customs data. Others are survey balances, in which a panel is asked whether a condition improved or worsened and the answers are collapsed into a single index. The two kinds are not interchangeable evidence: a survey reports opinion, quickly, while a count reports activity, slowly.

Practitioners sort them by timing. A leading indicator tends to move before the wider economy, a coincident one moves with it, and a lagging indicator confirms afterwards. The classification is empirical rather than definitional, so it is argued over: an indicator that led reliably in one cycle has lagged in the next, and the ordering is drawn from historical relationships that can change.

The most common misreading is to treat the headline level as the news. Markets price the difference between the reading and what was already expected, so a strong figure that falls short of the consensus has been followed by the reaction a weak figure would suggest. Two further traps sit alongside it: most series are revised, sometimes substantially, in later releases, and seasonal adjustment means the published figure is a modelled number rather than the raw count, with different agencies using different adjustment methods on the same underlying data.