Economic Indicators

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To understand economic indicators, we must understand the ways in which economic indicators differ.
There are three major attributes each economic indicator has: Relation to the Business Cycle / Economy Economic Indicators can have one of three different relationships to the economy: Procyclic: A procyclic (or procyclical) economic indicator is one that moves in the same direction as the economy.
So if the economy is doing well, this number is usually increasing, whereas if we're in a recession this indicator is decreasing.
The Gross Domestic Product (GDP) is an example of a procyclic economic indicator.
Countercyclic: A countercyclic (or countercyclical) economic indicator is one that moves in the opposite direction as the economy.
The unemployment rate gets larger as the economy gets worse so it is a countercyclic economic indicator.
Acyclic: An acyclic economic indicator is one that has no relation to the health of the economy and is generally of little use.
The number of home runs the Montreal Expos hit in a year generally has no relationship to the health of the economy, so we could say it is an acyclic economic indicator.
Frequency of the Data In most countries GDP figures are released quarterly (every three months) while the unemployment rate is released monthly.
Some economic indicators, such as the Dow Jones Index, are available immediately and change every minute.
Timing Economic Indicators can be leading, lagging, or coincident which indicates the timing of their changes relative to how the economy as a whole changes.
Leading: Leading economic indicators are indicators which change before the economy changes.
Stock market returns are a leading indicator, as the stock market usually begins to decline before the economy declines and they improve before the economy begins to pull out of a recession.
Leading economic indicators are the most important type for investors as they help predict what the economy will be like in the future.
Lagged: A lagged economic indicator is one that does not change direction until a few quarters after the economy does.
The unemployment rate is a lagged economic indicator as unemployment tends to increase for 2 or 3 quarters after the economy starts to improve.
Coincident: A coincident economic indicator is one that simply moves at the same time the economy does.
The Gross Domestic Product is a coincident indicator.
List of Economic Indicators Gross Domestic Product (GDP) (nominal and real) (for the entire nation or per individual) Index of Leading Indicators Gross national happiness (GNH), a new concept relating happiness with economic growth Population Labor Force: Employment rate, Average Weekly earnings Public Expenditure, Revenues, Budget Surplus and Deficit, National Debt Personal Income, Expenditure, Savings International: Balance of Payments & Balance of Trade Productivity Survey Manufacturing output, Capacity Utilization, Inventories Money Supply, Interest Rates, Yield on various financial Instruments and Yield Curves.
Stock Market Indices Inflation, CPI, Producer Price Index New Home Sales Retail Sales, Auto Sales Lagging indicator, a historical indicator following an event which reacts slowly to economic changes Genuine Progress Indicator, a concept in green economics and welfare economics that has been suggested as a replacement metric for gross domestic product
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