When using the economic calendar, there are a few key indicators that every investor should be aware of. The two most important economic indicators to comprehend are:
Leading indicators: Leading indicators are any measurable or observable variables that predict future outcomes and events by looking ahead in time. With a leading indicator, you are attempting to forecast the timing, duration, and significance of future business and economic trends.
Lagging indicators: Lagging indicators are the inverse of leading indicators in that they look back rather than forward to see if the desired outcome was achieved. A lagging indicator can confirm whether or not a long-term trend or shift in the economy has occurred. Lagging indicators are typically easy to measure, identify, and compare against, but one disadvantage is that they may provide important insights too late, leaving no time to act.