Tuesday, January 4, 2011

Economic indicators

Leading Coincident and lagging economic indicators

Leading indicators tell of changes before the economy reacts to the changes as an whole. "Leading indicators are used as a short term predictors of an economy."(wikipedia.org)
-stock market returns
-consumer expectations
-money supply
are leading indicators

Coincident indicators change around the same time the economy changes itself, it provides current information about the current economy.
-Gross Domestic Product (GDP)
-industrial production
-personal income
are Coincident indicators

Lagging indicators are changes after the economy has changed, the lag remains a few quarters of the year.
-unemployment rate
-average prime rate charged by banks
-manufacturing trade to sales inventories
are lagging indicators

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