Economic indicators are useful for companies, governments and investors. They measure aspects of the health of an economy. This article explains what exactly economic indicators are, what specific examples there are and who collects them.
Indicator Definition Economy
Economic indicators are also referred to as Macroeconomic key figures or Economic indicators designated. These are used to create economic forecasts. Such indicators are used globally in reports and economic reports. These include
- Annual financial statements
- Sales reports
- Surveys and statistics
- Quarterly figures
Economic indicators are versatile. They can contain information that is of interest to a company, but also to governments and investors. These are parameters that Health of the economy of a country.
Especially in the areas of Economic research and Economic policy the key figures are used. Changes in the economy should be recognized in good time. The figures are used to make well-founded, fact-based decisions for the future.
Movements in the economy are referred to as business cycles or economic fluctuations. These fluctuations can be calculated and analyzed with the help of economic indicators. current trends be understood in relation to the economy.
In principle, economic indicators can be divided into two groups:
- Leading indicatorsSuch indicators are used to assess where an economy might be heading. They are often used to implement political measures, as they often represent the first phase of a new economic cycle. A concrete example is the interest rate.
- Tracking indicatorsThey represent the past development of an economy in certain areas and therefore refer to the past. A concrete example is the gross domestic product.
What characterizes good economic indicators?
Economic indicators are often the basis for important decisions, which is why they must fulfill certain criteria. They must be Representative informationwith precise definitions that reliable and comprehensible are.
They must also be included in the always at the same intervals be collected in order to provide meaningful data. This can be done monthly, quarterly, quarterly or annually. The long-term survey enables comparisons to be made that allow statements to be made about trends.
Who calculates economic indicators?
There is not a single institute that publishes such data. The key figures are published by economic institutions, governments, statisticians, central banks or associations published.
A concrete example for Germany is the Federal Statistical Office. It publishes figures on various sectors, such as the change in industrial production, and thus provides concrete indications of important economic trends.
Economic indicators Examples
In this section we show some examples of particularly important economic indicators:
- Unemployment rateIn Germany, the unemployment rate is calculated by the Federal Employment Agency. It shows the relative underutilization of the supply of labour. For this purpose, registered unemployed persons are related to the labor force.
- GDP (gross domestic product)GDP is also known as economic growth and shows how much a country has achieved economically over a certain period of time. It is price-adjusted and calculated on the basis of the previous year.
- Inflation rate: Inflation is the increase in the price level. This figure is determined by the consumer price index for Germany, published monthly by the Federal Statistical Office. It is the percentage change in the consumer price index compared to the previous year.
- Industrial productionThis is a measure of the production of a specific sector of an economy. The industrial sector includes, for example, mining, manufacturing and utilities.
Conclusion: What is an economic indicator?
Economic or cyclical indicators are Measured figures, the Information on the health of a country's economy give. They are particularly important in the areas of economic policy and economic research, but can also be taken into account by companies and investors.
You should enable well-founded decisionswhich is why they must be representative, reliable and traceable. This also includes regular measurements at the same intervals. Economic indicators are, for example published by central banks, governments or economic institutions.
Specific examples of important economic indicators are the unemployment rate, GDP or gross domestic product, the inflation rate or industrial production. The unemployment rate is collected by the Federal Employment Agency, for example.