What is an Economic Indicator?

Economic Indicator Definition. An Economic Indicator, generally issued by a government agency, is statistical data that attempts to signal, measure or describe current economic growth and stability. Economists use these indicators to assess trends in the economy and set policy directions for the government to consider before implementing. Economic indicators come in three types: 1) leading, which are ones with predictive value related to future prospects; 2) lagging, ones that become apparent only after a specific activity has shaped market trends; and 3) coincident, those occurring at the same time as the economic activity they seek to describe. Sometimes called Business Indicators, these figures allow for analysis of economic performance, support forecasts of future directions, and aid in the study of business cycles. Some examples are unemployment, housing starts, Consumer Price Index, industrial production, bankruptcies, GDP, stock market prices, money supply changes, and housing starts.

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