A Talk about Economic Indicators
“Economic indicators are much depended upon by the investors who chalk out their investing plans according to their judgment based on these indicators. ”
Every economy is a very complex phenomenon. In all the economic setups there are certain figures and data that give an indication about the health of the economy as well as tell something about the future course that the economy might take.
It does not mean that all this gathering and analysis of data is a very simple job. It takes the intellectual might of many an economist to arrive at certain probable conclusions. Even then, it happens so that the predictions come to a naught totally and it seems as if an economy has a mind of its own that can’t be comprehended by anyone.
Nevertheless, economic indicators are much depended upon by the investors who chalk out their investing plans according to their judgment based on these indicators.
Some investors even stall huge investments (that may be lucrative in the present) for fear of losses in future. Let’s discus some of them and try to figure out their significance.
Consumer Price Index is one such indicator. It can be called a method to gauge the price level of various goods and services purchased by people at large. In fact, the rate of inflation is closely monitored with the help of this indicator
Next is the Gross Domestic Product. It pertains to those data that relate to expenditure, consumption, exports, inventories etc. These data are continuously revised and re-revised at frequent intervals according to different prevalent practices in various countries.
Producer Price Index is also used to find about the current as well as future health of the economy. In it the wholesale prices of goods are taken into account. Inflation is also seen to be closely linked to the values of this indicator.
Retail Sales Number talks about all those receipts that are obtained from the retail stores. However, services are not included in this indicator. As a result the figures got from this indicator are less than half of the figures that take personal consumption into account.
So, we see that the above-mentioned economic indicators are a very tedious and tricky affair and huge sums of money, data and calculations have to be taken into account before any kind of satisfactory prediction.
Author - DeeKay
Tags - Finance, Economy
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