What Is a Lagging Indicator? Definition, Examples & Importance

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The Street

By TheStreet.com Staff What Are Lagging Indicators? How Do They Differ from Leading Indicators?In English, the verb “to lag” means to fall behind, and it usually appears with negative connotations. But in finance, lagging indicators are often just as important as leading indicators because they serve as confirmation that changes in patterns or trends have taken place. Unlike leading indicators, which are forward looking, lagging indicators don’t predict trends. Rather, analysts use them to verify that a shift or change in the market has occurred. Because the data or statistics they represent h…

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