Economic Indicators – A Cheat Sheet
We’ve compiled the most commonly used economic indicators from our monthly market commentary here for your quick reference. Economic indicators can be categorized into three main groups: leading indicators, coincident indicators, and lagging indicators. Here’s a list of some common economic indicators referenced in our market commentaries divided into these categories:
These indicators provide insights into future economic trends.
Consumer Confidence Index: Measures consumer sentiment and expectations about the economy, which can indicate future consumer spending patterns.
Producer Price Index (PPI): Measures changes in the prices received by producers and can signal future inflation trends. The reason why it is a leading indicator is that higher/lower producer prices get passed to the consumer.
Purchasing Managers’ Index (PMI): An index that measures the month-over-month change in economic activity within services or manufacturing. The reading can range between 0 and 100. A reading above 50 indicates an expansion, while a reading below 50 indicates a contraction.
Housing Permits and Starts: The number of new housing permits and housing starts can signal future trends in construction.
Average Weekly Initial Jobless Claims: High levels of initial jobless claims may indicate an economic downturn as businesses lay off workers.
These indicators reflect the current state of the economy.
Gross Domestic Product (GDP): The total value of goods and services produced in the economy, which directly measures its current size and performance. Can be viewed as a coincident indicator (a snapshot), or it can be considered a lagging indicator, as it reflects past economic activity.
Industrial Production Index: Measures the output of the industrial sector and reflects current manufacturing activity.
Retail Sales: The total sales of goods and services by retailers, indicating current consumer spending levels.
Personal Income and Expenditures: Reflects current income levels and consumer spending patterns.
Employment Indicators: Includes the Non-Farm Payrolls report and Unemployment Rate, which provide a snapshot of the current labor market conditions.
These indicators confirm past economic trends.
Consumer Price Index (CPI): Measures changes in consumer prices and reflects past inflation trends.
Balance of Trade: Measures the difference between the value of a country’s exports and the value of country’s imports for a given period.