In addition to company and industry data, the state of the overall economy can provide insight to investors for their decision-making . For instance, when considering whether to invest in a company that depends on consumer spending, it's useful to know whether the economy faces a recession.

    Economic indicators provide information about an economy and whether it is expanding or contracting. Most indicators are released monthly by government departments and agencies. They typically report on activity in the previous month and year for comparison purposes. Here are ten important U.S. economic indicators that investors watch.

    Key Takeaways

    • Individuals who measure economic activity and predict future trajectories rely on the analysis of key pieces of macroeconomic data.
    • Known as economic indicators, these data quantify various aspects of an economy.
    • Economic indicators measure everything from economic growth to changes in prices to unemployment.
    • The markets can move on news about key economic indicators.
    • Information provided by economic indicators can help people make decisions about their investments.

    1. GDP

    The gross domestic product , or GDP, of an economy provides the overall value of the goods and services that economy produces and indicates whether it is growing or slowing.

    The Department of Commerce’s look at the quarterly change in GDP breaks down the activity into changes in consumer spending, business investment, and government spending, as well as the net impact of foreign trade. The government puts out a preliminary first estimate, updates with a revised second reading as it gets more input, and then delivers a third and final report.

    2. Employment Figures

    The Department of Labor puts out a monthly release on employment that includes the number of jobs created the previous month by the private sector, the government and some specific industries, as well as the national unemployment rate. Low unemployment can point to a strong economy, but can also predict rising inflation.

    3. Industrial Production

    Industrial production is a measure of output of manufacturing-based industries, including those producing goods for consumers and businesses. This monthly release from the Federal Reserve also reports on capacity utilization in the factory sector.

    4. Consumer Spending

    Consumer spending accounts for two-thirds of U.S. gross domestic product and is a good gauge of consumer health. The Department of Commerce’s monthly release on personal income and outlays provides data on consumer spending. It also provides information on inflation through a price index that reflects changes in how much consumers have to spend to buy certain items.

    5. Inflation

    Inflation is the general price level rise of goods and services in an economy. Too much inflation can mean the economy is overheating while very low inflation can be a harbinger of economic recession.

    Depending upon the selected set of goods and services used, multiple types of inflation values are calculated and tracked as inflation indexes. The most commonly used inflation indexes are the  Consumer Price Index (CPI) and the  Wholesale Price Index (WPI). The Producer Price Index (PPI) is also used to measure inflation as it relates to producers.

    6. Home Sales

    Home sales represent a major purchase for most people. Thus, the Department of Commerce’s monthly report on new residential sales speaks to consumer sentiment.

    This report, based on contracts to buy new or existing homes, provides input on sales of single-family homes regionally and nationally. It also reports on median and average sales prices. The National Association of Realtors (NAR), a private realty trade association, puts out a monthly report on sales of existing homes, based on closed sales.

    7. Home Building

    The number of houses that builders started working on, as well as the number of permits that they obtained to start building houses, indicates real estate developers’ confidence level in the economy. The Department of Commerce’s monthly release on new residential construction provides this regional and national information.

    8. Construction Spending

    Another construction-based indicator is the change in monthly construction spending, in dollars, nationally. This spending encompasses various construction-related expenses, such as labor and materials and engineering work. The Department of Commerce's report provides a breakdown of residential and nonresidential public and private construction.

    9. Manufacturing Demand

    The report on manufacturers’ shipments, inventories, and orders gives an indication of demand for manufactured items. The Department of Commerce puts out a preliminary monthly report and a more lengthy report as a follow up. They break down manufactured goods by many types and industries, from electronic instruments to machine tools to nondurable consumer goods.

    10. Retail Sales

    The Department of Commerce’s monthly release on retail and food services sales is an indication of consumer spending health. This report shows retail sales in various sectors, such as department stores, furniture stores, and home furnishing stores.

    What Is an Economic Indicator?

    It's a metric that's generated by the collection of information about certain parts of an economy. Economic indicators can provide insight into overall economic health.

    Where Can I Find Economic Indicators?

    Various departments and agencies of the U.S. government release the reports on U.S. economic indicators. In addition, business and market publications and websites typically issue economic indicator news upon its release.

    Is a Macroeconomic Indicator the Same as an Economic Indicator?

    Yes. You'll see both terms used. Individual indicators that reflect different areas of the economy help us assess the behavior of the overall economy.

    The Bottom Line

    No one key indicator paints a complete picture of the state of the economy. However, a combination of indicators—such as the top ten key economic indicators described above—can be used to inform a variety of economic and investment decisions.

    What is the most important economic indicator?
    Since the real GDP measures the entirety of the U.S. economy, it's considered to be a key indicator of economic health. The real GDP is most often framed in terms of its percentage growth or decline. When the real GDP increases, it suggests businesses are producing a higher value of goods and services. more
    Can Excel import JSON?
    JavaScript Object Notation (JSON) is a common data format, and you can import it into Excel. To transform the SalesPerson column from text strings to a structured Record column: Select the SalesPerson column. Select Transform > Parse > JSON. more
    Does China import water?
    China mainly imports virtual water from the USA, India and Brazil, and mainly exports virtual water to the USA, Japan and Germany. The agriculture sector and the food sector represent the sectors with both the largest import and export virtual water quantities. more
    Does Jordan import water?
    In an agreement involving the U.S. and the UAE, Jordan is meant to receive 200 million cubic meters a year of desalinated water from Israel. That's roughly 20% of what the Jordanian government supplies its citizens and residents with today. more
    What does Eritrea import?
    Imports The top imports of Eritrea are Wheat or meslin flour ($39.5M), Vehicles; for the transport of goods ($17.2M), Grain sorghum ($15M), New pneumatic tyres, of rubber ($12M), and Cane or beet sugar and chemically pure sucrose, in solid form ($9.52M), importing mostly from Egypt ($78.4M), United Arab Emirates ($77.4 more
    Does Sudan import oil?
    It has invested heavily in Sudan's oil infrastructure, including the pipeline to Port Sudan and several refineries in the north. And so it benefits heavily from Sudan's oil industry, importing billions of dollars of oil per year. more
    Does Italy import beef?
    Imports In 2020, Italy imported $1.72B in Bovine Meat, becoming the 4th largest importer of Bovine Meat in the world. At the same year, Bovine Meat was the 50th most imported product in Italy. more
    Does Eritrea import food?
    Eritrea main imports are: machinery, fuel and food. Main import partners are: Saudi Arabia, Egypt, China, India, Germany, Italy, South Africa and Brazil. We have a plan for your needs. more
    Does India import garbage?
    The reason being cited for the decision is the shortage of waste generated in India. India imports plastic scraps from China, Italy, Japan and Malawi for recycling, which has increased over the years. India recycles 4 million tonnes of plastic while consuming 13 million tonnes. more
    Does Israel import gas?
    Gas Imports Israel imports 2% of its natural gas consumption (5,650 MMcf in 2015). more
    Does Mcdonalds import meat?
    Most of the beef that McDonald's uses in its U.S. restaurants is raised domestically, "although we import a small percentage of our 100% beef from suppliers in Australia and New Zealand to supplement our U.S. purchases," the company says. All of the chicken served in McDonald's U.S. restaurants is raised domestically. more


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