Economic Indicator Forecast An economic indicator is a statistic of the current status of the economy. This can predict how the economy may perform in the future. Investors and other private or government organizations use this information as a tool to make business decisions. By gathering historical data about the economy and comparing it to current trends, one can compile a snapshot of economic fluctuations. The direction of an indicator may vary according to changes in the economy. The indicator can be leading, lagging, or coincident. Leading indicators are changes before the economy has recognized the changed. Lagging indicators do not change until a few quarters after the economy has change. Coincident indicators move at the same time as the economy (The Library of Congress, 2005). Some of the common indicators are GDP, Unemployment Rate, Inflation Rate, Capacity utilization, Auto sales, and Personal income. As the explanation of these six indicators will be use to forecast the future of the economy, the trend of these indicators will also be used to evaluate the economy's historical and future outcome. Inflation Rate The Congressional Budget Office (CBO) projects that inflation, as measured by the year-to-year change in the consumer price index for all urban consumers (CPI-U), is projected to decline from 2.8% this year to 2.3% next year. Rates of inflation for food and energy prices, which increased during the first half of this year are expected to be moderate. This should keeping overall inflation lower than in the recent past. In addition, the underlying rate of consumer price inflation is expected to be relatively stable, averaging slightly above 2% over the next year and a half (Congressional Budget Office [CBO], 2007). Oct 2007 Nov 2007 Dec 2007 Jan 2008 Feb 2008 Mar 2008 Forecast Value 2.30 2.13 1.89 1.88 1.79 2.01 Inflation rate in the U.S. economy will decelerate in 2007 and hold nearly steady over the following two years, according to 49 forecasters surveyed by the Federal Reserve Bank of Philadelphia. Measured on a fourth-quarter over fourth-quarter basis, inflation rate will fall to 2.3% this year and hold steady at that rate in 2008 and 2009. An alternative measure of core inflation, the rate of change in the price index for personal consumption expenditures (PCE), is also expected to decelerate, to 2.0%, in 2007 before rising to 2.1% in 2009. Core inflation measures the rate of change in a price index that excludes the prices of food and energy. This is the first Survey of Professional Forecasters to report projections for core inflation (Federal Reserve Bank of Philadelphia, 2007).
Clark, Todd and Christian Garciga. "Recent Inflation Trends." Economic Trends (07482922), 14 Jan. 2016, pp. 5-11. EBSCOhost, cco.idm.oclc.org/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=112325646&site=ehost-live.
The United States economy is an ever-changing and dynamic system. It is a structure that is made up of people who make critical financial decisions every hour of every day. Every organization, from Wall Street giants to the guy selling hot dogs on the street, is effected by the movements of the overall economy. These economic movements, or trends, can push sales for some, or put others out of business. Though they are intangible, these forces can still be measured, studied, and presented in the form of economic indicators. They can take the form of anything from the productivity of the overall economy, to the supply of money in it. This paper will review the economic indicators Consumer Sentiment Index and the Unemployment Rate and see how they affect theme park giant, Six Flags.
“Measurement error in the consumer price index: where do we stand?” has provided a detailed analysis of the causes of bias in the US consumer price index and the uncertainty behind both previous and their own estimates. Of these, upper-level substitution and quality or quantity changes have proven both the most significant and the most controversial. With the figure for the bias calculated at a plausible 0.87%, it has been made clear the practical implications of their argument across the economy, and that policy makers must keep track of bias estimates and inform their choices acknowledging them.
Throughout the years, the United States of America has endured a very strong economy. Although there have been many obstacles of hindrance such as trade deficits, wars, hostile governments and embargo’s, the economic status of the United States still continues to prevail. Just to name a few, the economy of this country survives on simple commodities such as pork, oranges, precious metals and the productive efforts of its citizens. In this paper, I will not only introduce and discuss the logistics of both the United States and the United Kingdom; I will discuss its key economic obstacles and its economic well being.
Unstable economy – Economy changes constantly. Changes in interest rates, inflation and unemployment rates affect the demand of the product;
There are very many different economic indicators that are used to analyze economic activity of a company, industry, country, or region. There are three different general trends (directions for prices or rates) in the economy. "Those with predictive value are leading indicators; those occurring at the same time as the related economic activity are coincident indicators; and those that only become apparent after the activity are lagging indicators. Examples are unemployment, housing starts, Consumer Price Index, industrial production, bankruptcies, GDP, stock market prices, money supply changes, and housing starts also called business indicators." (http://www.investorwords.com/1643/economic_indicator.html)
The suite of Consumer Price Index insights is utilized by economic specialists and managers as a macroeconomic marker. The insights can be utilized to advice choices on monetary and government strategy. Various government divisions utilize Consumer Price Index statistics to screen how costs for particular products or administrations contrast and general levels of
There is a close relationship between Gross Domestic Product (GDP) and the unemployment rate as it will relate to the decrease or increase of inflation rate. The inflation rate will increase when GDP and unemployment decreases, because it will affect the purchasing power of the people of a particular country.
A lot can be learnt from this economic indicator. High levels of inflation indicate an unp...
Inflation and unemployment are two key elements when evaluating a whole economy, and it is also easy to get those figures from the National Bureau of Statistics when you want to evaluate them. However, the relationship between them is a controversial topic, which has been debated by economists for decades. From some famous economists such as Paul Samuelson, Milton Freidman, etc. to some infamous economists, this topic received a lot of attention. However, it is this debate that makes the thinking about it evolve. In this essay, the controversial topic will be discussed by viewing different economists’ opinions on the subject according to time sequencing.
Following the trend of economy, it is important to investors to understand that strong economy creates strong stock market. To elaborate further, as stock prices are increased by current and future expectations of earnings, thus without a strong economy it would be difficult for the companies to increase and sustain their earnings (Kong 2013). The economy development is usually calculated using the gross domestic product of a countries. On the other hand, a change is the stock price can also cause a major impact to the consumers and investors directly. Hence, a loss in confidence by investors can cause a downturn in consumer spending in the long term, which will also affect the economy’s output (Aysen 2011). The graph below shows the relationship of stock market price (KLCI) and the GDP of Malaysia in 2009. Thus, it can be concluded that the economy and the stock market has a positive relationship.
For the individual who watches CNN a great deal, the term Economic Indicators well recognized. However, for the individual who chooses not to make CNN a primary station, the term Economic Indicators can be extremely confusing. Economist often use very unlike terms when referring to the fluctuating economy. Economic Indicators happens to be one of the many terms that they use. So, what exactly are Economic Indicators, and what purpose do they serve? In addition to the previous stated questions, are they really that important?
The macroeconomic environment is a dynamic environment, which could not remain unchanged (Gajewsky 2015). There are many factors influence the global macroeconomic environment, such as interest rate, exchange rate, GDP，aggregate demand, monetary policy and other macroeconomic variable (Oxelheim and Wihlborg 2008). These factors are closely associated with commodity price.
The increase in prices is known as inflation. This macroeconomic objective aims at keeping prices as low as possible. Economists normally would like to understand the changes of what is happening in the purchasing power of consumers. The price stability can be measured by looking into the (CPI) which is the index of the prices of representative basket of consumer goods and services. According to StatsSA, (2016) the inflation rate averaged 9.27 percent from 1968 to 2016. Consequently, the report states that the consumer prices index in South Africa increased by 6 percent year-on-year in July of 2016.The economists however, argue that the inflation figure obtained was one of the lowest ever experienced by south Africa due to the fact the cost of electricity and fuel remained constant. This shows that South Africa at the moment is currently doing well; however only because inflation is very dynamic and changes so it can not be guaranteed that it will remain the same