The actual measures used as coincident economic indicators are collected by different government agencies and private groups, including the Bureau of Labor Statistics and Bureau of Economic Analysis. These measures are then compiled by economists and number crunchers at the Conference Board.

Four Measures

Each of these four individual indicators is useful in its own right, but when combined as a composite measure, even greater insight into the business-cycle activity is achieved.

How They Track

First, take note of the somewhat jagged red line displayed in the exhibit. It provides a hypothetical tracking of real gross domestic product over several months. Two peaks are evident, labeled with P. One trough is displayed as well, marked by T.

Coincident Indicators

A click of the [Coincident] button reveals a thin green line that rises and falls together with the rise and fall of real GDP, tracking along with the peaks and troughs of the business cycle. This green coincident indicator line lies virtually on top of the red real GDP line.

Here and Now

Having accurate information about CURRENT economic conditions is not as easy as it might seem. Collecting, processing, and analyzing data takes time. While financial data (stock market prices, interest rates, etc.) are available almost instantaneously, most information about the economy is available only weeks, if not months, after the fact. Coincident indicators are some of the most timely economic measures available.

Practical and Theoretical

In particular, coincident economic indicators measure four key aspects that is the aggregate economy--employment, production, income, and sales. When concerns are directed toward the current state of the macroeconomy, these are the four most important areas of interest. When the aggregate economy is expanding or contracting, these are the four areas that are expanding and contracting.

The Other Two

• Leading: These are ten measures that generally indicate business-cycle peaks and troughs three to twelve months before they actually occur. Leading economic indicators predict where the economy is headed in the near future, providing enormous assistance to consumers, business leaders, and policy makers who need to anticipate and plan for future economic conditions.


• Lagging: These are seven measures that generally indicate business-cycle peaks and troughs three to twelve months after they actually occur. Lagging economic indicators provide the final, conclusive evidence that peaks and troughs did occur, making it possible to direct attention to the next phase of the business cycle.