Economic indicators are critical data points used by investors, analysts, and policymakers to assess the overall health of an economy. These indicators help predict future economic activity and can greatly influence stock market movements. Broadly, indicators are categorized into leading, lagging, and coincident indicators. Leading indicators such as new housing starts, manufacturing orders, and stock market performance signal future economic activity. Lagging indicators like unemployment rates and inflation confirm patterns and trends after they occur. Coincident indicators, including GDP and industrial production, provide real-time snapshots of the economy. Inflation (measured by CPI or WPI), interest rates set by the central bank, and employment statistics are especially watched closely by market participants. Positive or negative surprises in economic data can lead to sudden movements in equity markets. Traders and investors monitor these indicators to adjust portfolio allocations and hedge against risks. Understanding economic indicators allows investors to time entries and exits more effectively, improving investment decisions.