Which of the following is NOT a leading economic indicator?

The concept of leading economic indicators plays a crucial role in predicting future economic activity. Leading indicators are metrics that typically change before the economy as a whole changes, allowing economists and policymakers to forecast growth or recession.

Unemployment rates, which is identified in this case, are considered a lagging indicator rather than a leading one. Lagging indicators tend to move after economic trends have already been established. For instance, when an economy starts to improve and expand, businesses may wait to hire more employees until they are sure that this growth is sustainable, resulting in unemployment rates reflecting changes in the economy only after they occur.

In contrast, stock market performance, manufacturing activity, and new housing permits are all leading indicators. Stock market performance often rises or falls in anticipation of economic growth or downturns. Manufacturing activity signals changes in production levels that precede overall economic trends, and new housing permits indicate future construction activity, reflecting confidence in the economy.

Understanding these distinctions helps interpret economic data accurately and gauge the likelihood of future economic conditions.