Leading vs. Lagging Indicators: Looking Forward vs. Backward
Leading indicators predict the future; lagging indicators confirm the past. This distinction is key for analyzing business cycles or system health. The main footgun is relying only on lagging data, forcing you to react to problems that have already occurred.
Leading indicators are predictive, like headlights showing what's ahead; lagging indicators are descriptive, like a rearview mirror. In economics, housing starts (leading) precede growth, while the unemployment rate (lagging) confirms it after the fact. The biggest footgun is making future decisions using only past data, which means you're always reacting to problems instead of preventing them.
Read the original → Wikipedia: Economic indicator
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