Lagging indicators are the indicators which can be known after an event has occurred. It is an observable or measurable factor after the economic, financial or business variable with which it is correlated changes.

Lagging indicator is key performance indicator that reflects some measure of output or past performance that can be seen in financial statements and reflects the impact of management decisions or business strategy.

Lagging indicator is a financial sign that becomes apparent only after a large shift has taken place. Lagging indicators confirm long term trend.it is way to confirm about the shift in economy.

Some examples of lagging indicators are unemployment rate, corporate profits, and labor cost per unit of output. Interest rate can also be good lagging indicators as rate changes as a reaction to severe movements in the market. Some indicators relating to market are GDP, CPI and BOT.

Unemployment Rate:-

It is that they confirm pattern that is occurring over time. It is one of the best indicators. If unemployment rose last month and month before, it indicators that overate economy has been doing poorly and will continue to as it.

Corporate Profits are deflated by unit labor costs and are usually long. Measures of corporate profits diverge at present, but have been improving for the past several years.Changes in GDP:-

GDP is most important measure of the economy’s current health. When GDP increases it is a sign the economy is strong. In fact businesses will adjust their payroll, inventory based on GDP.

Consumer Price Index:-

The consumer price index (CPI) reflects the increased cost of living. The CPI is calculated by measuring the costs of essential goods and services, including vehicles, clothing, electronics.

Currency Rate:-

A strong currency increases a country’s purchasing and selling power with other nations .The country with stronger currency can sell its products overseas at higher foreign prices and import products more cheaply.

Corporate Profits:-

Corporate profits are related to rise in GDP as they reflect an increase in sales and job growth. They also increase stock market performance as investors look for places to invest income.

Balance of Trade:-

The Balance of Trade is the net difference between the value of exports and imports and tells surplus or deficit in the trade.

Written by- Diya Chopra