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Some Important Economic Indicators

A Beginner's Guide to Economic Indicators

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Many different groups collect and publish economic indicators, but the most important American collection of economic indicators is published by The United States Congress. Their Economic Indicators are published monthly and are available for download in PDF and TEXT formats. The indicators fall into seven broad categories:

  1. Total Output, Income, and Spending
  2. Employment, Unemployment, and Wages
  3. Production and Business Activity
  4. Prices
  5. Money, Credit, and Security Markets
  6. Federal Finance
  7. International Statistics
Each of the statistics in these categories helps create a picture of the performance of the economy and how the economy is likely to do in the future.

Total Output, Income, and Spending

These tend to be the most broad measures of economic performance and include such statistics as:

  • Gross Domestic Product (GDP) [quarterly]
  • Real GDP [quarterly]
  • Implicit Price Deflator for GDP [quarterly]
  • Business Output [quarterly]
  • National Income [quarterly]
  • Consumption Expenditure [quarterly]
  • Corporate Profits[quarterly]
  • Real Gross Private Domestic Investment[quarterly]
The Gross Domestic Product is used to measure economic activity and thus is both procyclical and a coincident economic indicator. The Implicit Price Deflator is a measure of inflation. Inflation is procyclical as it tends to rise during booms and falls during periods of economic weakness. Measures of inflation are also coincident indicators. Consumption and consumer spending are also procyclical and coincident.

Employment, Unemployment, and Wages

These statistics cover how strong the labor market is and they include the following:
  • The Unemployment Rate [monthly]
  • Level of Civilian Employment[monthly]
  • Average Weekly Hours, Hourly Earnings, and Weekly Earnings[monthly]
  • Labor Productivity [quarterly]
The unemployment rate is a lagged, countercyclical statistic. The level of civilian employment measures how many people are working so it is procyclic. Unlike the unemployment rate it is a coincident economic indicator.

Production and Business Activity

These statistics cover how much businesses are producing and the level of new construction in the economy:
  • Industrial Production and Capacity Utilization [monthly]
  • New Construction [monthly]
  • New Private Housing and Vacancy Rates [monthly]
  • Business Sales and Inventories [monthly]
  • Manufacturers' Shipments, Inventories, and Orders [monthly]
Changes in business inventories is an important leading economic indicator as they indicate changes in consumer demand. New construction including new home construction is another procyclical leading indicator which is watched closely by investors. A slowdown in the housing market during a boom often indicates that a recession is coming, whereas a rise in the new housing market during a recession usually means that there are better times ahead.

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