Which of the following best defines a 'leading indicator'?

A 'leading indicator' is a statistic or measure that provides insight into the potential direction of future economic activity. It is used by economists and analysts to forecast changes in the economy before they occur, allowing businesses and policymakers to make informed decisions based on anticipated economic trends. Leading indicators are crucial for understanding where the economy may be headed, such as shifts in consumer spending, changes in stock market prices, or variations in new business orders.

The other options represent different types of economic indicators. Evaluations of past economic performance correspond to lagging indicators, which confirm trends after they have occurred. Measures reflecting current economic status fall under coincident indicators, which provide a snapshot of the economy at present. Historical economic data refers to information that tracks past performances, aligning with lagging indicators but not predicting future changes. Thus, the focus on prediction in the choice selected is what categorizes it as a leading indicator.