More Economic Indicators

Prices

This category includes both the prices consumers pay as well as the prices businesses pay for raw materials and include:

• Producer Prices [monthly]
• Consumer Prices [monthly]
• Prices Received And Paid By Farmers [monthly]

These measures are all measures of changes in the price level and thus measure inflation. Inflation is procyclical and a coincident economic indicator.

Money, Credit, and Security Markets

These statistics measure the amount of money in the economy as well as interest rates and include:

• Money Stock (M1, M2, and M3) [monthly]
• Bank Credit at All Commercial Banks [monthly]
• Consumer Credit [monthly]
• Interest Rates and Bond Yields [weekly and monthly]
• Stock Prices and Yields [weekly and monthly]

Nominal interest rates are influenced by inflation, so like inflation they tend to be procyclical and a coincident economic indicator. Stock market returns are also procyclical but they are a leading indicator of economic performance.

Federal Finance

These are measures of government spending and government deficits and debts:

• Federal Receipts (Revenue)[yearly]
• Federal Outlays (Expenses) [yearly]
• Federal Debt [yearly]

Governments generally try to stimulate the economy during recessions and to do so they increase spending without raising taxes. This causes both government spending and government debt to rise during a recession, so they are countercyclical economic indicators. They tend to be coincident to the business cycle.

International Trade

These are measure of how much the country is exporting and how much they are importing:

• Industrial Production and Consumer Prices of Major Industrial Countries
• U.S. International Trade In Goods and Services
• U.S. International Transactions

When times are good people tend to spend more money on both domestic and imported goods. The level of exports tends not to change much during the business cycle. So the balance of trade (or net exports) is countercyclical as imports outweigh exports during boom periods. Measures of international trade tend to be coincident economic indicators.

While we cannot predict the future perfectly, economic indicators help us understand where we are and where we are going. In the upcoming weeks I will be looking at individual economic indicators to show how they interact with the economy and why they move in the direction they do.

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