What is the classification of GDP in relation to market indicators?

Gross Domestic Product (GDP) is classified as a coincident indicator, meaning it moves in tandem with the overall economy. Coincident indicators are economic measures that reflect the current state of economic activity. Because GDP measures the total value of all goods and services produced in a country during a specific period, it provides an immediate snapshot of economic health and growth.

When GDP increases, it typically signifies that the economy is performing well, with rising consumer spending and business investments. Conversely, a decline in GDP indicates economic contraction. Since GDP provides a direct assessment of economic conditions as they are happening, it is considered a coincident indicator, rather than leading or lagging. Leading indicators change before the economy starts to follow a particular pattern, while lagging indicators reflect changes after the economy has followed a certain trend. Direct is not a classification typically used in this context. Thus, classifying GDP as a coincident indicator accurately reflects its role in economic analysis.