Coincident Indicator

DEFINITION of 'Coincident Indicator'

A metric which shows the current state of economic activity within a particular area. Coincident indicators are important because it shows economists and policymakers the current state of the economy. Coincident indicators include employment, real earnings, average weekly hours worked in manufacturing and the unemployment rate.

BREAKING DOWN 'Coincident Indicator'

Economic indicators can be classified into three groups based on the time period that is being measured. Lagging indicators change after the economy as a whole changes, coincident indicators show the current state of the economy and leading indicators show where the economy is going. Coincident indicators are often used in conjunction with leading and trailing indicators to get a full view of where the economy has been and how it is expected to change in the future.

The Federal Reserve publishes coincident economic indexes compiled from a variety of coincident indicators. By compiling several indicators into an index, some of the short-term noise associated with individual indicators can be eliminated, giving a more reliable measure.

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