Economic Indicators

Economic Indicators

From the book: The traders guide to Economic Indicators

Economic indicators are very important in economic analysis because they can be used to predict future prices of currencies and forecast the economic and financial outlook for the nation’s economy.The mentioned indicators below are from the USA.

Coincident Index (metric which shows the current state of economic activity within a particular area)

Number of Employees on non-agricultural (nonfarm) payrolls (in thousands)
Personal Income less transfer payments (nominal rate in Billions of chained 2005 dollars)
Industrial Production Index (2007=100)
Manufacturing and Trade Sales (in millions of chained 2005 dollars)

Leading Index (a measurable economic factor that changes before the economy starts to follow a pattern or trend. Leading indicators are used to predict changes in the economy, but they are not always accurate., Investopedia definition)

Average Workweek, production workers, manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers new orders for consumer goods and materials
ISM new orders index
Manufacturers new orders for non-defence capital goods (excluding aircraft)
Monthly building permits for new private housing
Stock prices
Leading Credit Index, M2 money supply prior to 1990
The interest rate spread between the 10-year Treasury bond and the Federal funds rate
Average Consumer expectations for economic conditions

Lagging Index (is a measurable economic factor that changes only after the economy has begun to follow a particular pattern or trend.