Meaning of "adjustment of X *lags* actual conditions in the labour markets"

I do not understand the meaning of the sentence in bold. Author wrote the following sentence:

The use of unemployment rate as the sole basis for the Variable Entrance Requirement is firstly problematic because the 3-month moving average is used. This means that the adjustment of the Variable Entrance Requirement substantially lags actual conditions in regional labour markets.

I am particularly confused by how the author used the word/verb lags. Shouldn't it be followed by behind?

So lag means fall behind in movement, progress, or development; not keep pace with another or others. But actual labour market conditions is not something countable.

Answer

Various fields, including economics use the jargon terms "lagging" and "leading" indicators, along with the related verbs "lag" and "lead". As jargon these often appear as in your quoted text. In this case "lag" refers to a measurable output that results from or reliably follows some other condition.

For example, when interest rates go up, housing prices tend to go down (or increase more slowly). We can say therefore:

Housing prices lag interest rates

or alternately,

Interest rates lead housing prices

I'm sure you can think of many other examples that illustrate this same idea.

It may be useful to point to lagging and leading indicators for some factor which is difficult to measure directly, such as "quality of life". Instead economists may rely on measurable lagging indicators (such as consumer spending) to extrapolate the current value and trend for "quality of life".