Showing posts with label Lagging Indicator. Show all posts
Showing posts with label Lagging Indicator. Show all posts

Sunday 24 June 2012

Economic Factors - Economic Indicators



There are several economic factors that change prior to, during, or simultaneously with the business cycle. These factors are examined by analysts to determine the current state of the economy. We will examine the three common types of indicators below.
  • Leading IndicatorsA measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not always accurate. Bond yields are typically a good leading indicator of the market because traders anticipate and speculate trends in the economy.
    Other types of leading indicators include:
    • building permits (new private housing)
    • industrial production rates
    • money supply
    • S&P 500
    • average of weekly unemployment insurance claims
  • Lagging IndicatorsA measurable economic factor that changes after the economy has already begun to follow a particular pattern or trend. Lagging indicators confirm long-term trends, but do not predict them. Interest rates (especially the prime interest rate) are a good lagging indicator; rates change after severe market changes. Other examples are:
    • unemployment rates
    • corporate profit
    • labor cost per unit of output
  • Coincident Indicators: An economic factor that varies directly and simultaneously with the business cycle, thus indicating the current state of the economy.
    Some examples include:
    • nonagricultural employment
    • personal income
    • inventory/sales ratio
Economic indicators can have a huge impact on the market and knowing how to interpret and analyze them is important for all investors.

Without further ado, the tutorial Economic Indicators to Know will examine 11 economic indicators we feel investors should understand.


Read more: http://www.investopedia.com/exam-guide/finra-series-6/economic-factors/economic-indicators.asp#ixzz1yhRcBvnR

Saturday 6 December 2008

US Job Losses by month in 2008 (A Lagging Indicator)




Job losses by month in 2008

Month---Jobs lost

November* -533,000
October * -320,000
September -403,000
August -127,000
July -67,000
June -100,000
May -47,000
April -67,000
March -88,000
February -83,000
January -76,000


Total 2008 1,911,000

* Preliminary.
Source:
Bureau of Labor Statistics
DECEMBER 6, 2008: Job Losses Worst Since '74: 533,000 Shed in November