What are lagging indicators?
In general, these series move up or down after the coincident series, e.g. income and employment, which are more commonly studied. In essence, they are the opposite of leading indicators. The composite lagging index is essentially a weighted average of the set of indicators that were classified as lagging by NBER economists in the 1970s. This set includes sales-to-inventory ratios, labor costs, and the prime rate. We are currently studying whether these series continue to be lagging indicators and whether the value of the lagging index can be improved.
