Economic Indicators

Definition of "Economic indicators"

Written by

Team Platinum of Naples GRI, ABR

Berkshire Hathaway HomeServices Florida Realty

Measures looking at the past , current an future direction of the economy. They may have an impact on the real estate market. Each month government bodies, including the Federal reserve System, and several economic institutions publish economic indicators. These consist of the following general categories:

1. Measures of general economic performance, including gross domestic product (GDP), personal income, capital expenditures, corporate earnings, and inventories.
2. Price indices measure the inflation rate. The consumer Price Index (CPI), a well-known inflation measure, is used as the cost-of-living index, which is related to employment contracts and social security. The Producer Price Index (PPI) monitors raw materials and semi-finished goods and measure prices at the early stage of the distribution cycle. It reflects changes in the general price level, or the CPI, before they actually occur. The GDP Implicit Deflator is another index of inflation that is used to isolate price changes in GNP calculation from real changes in economic activity.
3. Measures labor market conditions and signals conditions in employment such as the unemployment rate, average workweek in manufacturing, applications for initial jobless claims and hourly salary rates.
4. Money and credit market indicators include the money supply, consumer credit, the Dow Jones industrial Average(DJIA) and the Treasury bill rate.
5. Measures for major product markets that apply to segments of the economy such as housing, retail sales, steel, and automobile. Examples include housing starts, construction permits, auto sales, and retail sales.
6. economic indicators show a home buyer or a real estate investor something about national and local economic conditions, Industry trends are also revealed. see also index of leading economic indicators; lagging indicators.