NISM Certifications · NISM-Series-XV: Research Analyst · Economic Analysis
Which of the following is generally classified as a lagging economic indicator?
Average duration of unemployment is a lagging indicator because it changes only after the economy has already turned. Stock indices, building permits and new orders for consumer goods move ahead of the economy and are therefore leading indicators.
- AStock market index levels
- BBuilding permits issued
- CAverage duration of unemploymentCorrect
- DNew orders for consumer goods
Explanation
Lagging indicators change after the economy has already turned, confirming a trend. Average duration of unemployment rises or falls only after output has changed. Stock indices, building permits and new orders typically turn before the economy does, so they are leading indicators.
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