These are market indicators that anticipate a change in the direction of the economy. The index of leading indicators accurately forecasts the ups and downs of the business cycle. Such indicators include employment, company profits and certain commodity prices. For example, corporate profits start to rise during economic expansion but as the economy starts to peak, profit increases start to slow down. At the peak of the economy, profits begin to decrease. Therefore, profits lead the general economy, but may actually indicate a slowing down in the future.
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