Economic indicator definition
Economic indicator
An economic indicator is economic data used by analysts, traders and investors to determine investment and trading opportunities. The data is usually delivered on a macroeconomic level and defines the overall health of an individual economy.
What are the indicators of economic development?
The indicators of economic development are interest rate changes, the unemployment rate, CPI (consumer price index), industrial production, gross domestic product, retail sales, money supply changes and more.
Most economic indicators come from data released by governments, statistics agencies, non-profit organisations or universities.
Indicators get labeled as either leading, lagging or coincident.
- Leading indicators – such as imports, exports, manufacturing consumer durable purchases and new business formations – are used to predict an economy’s future progress.
- Lagging indicators include GDP (gross domestic product), inflation (CPI), unemployment rates and interest rates. Such data sets reveal information after the event has happened.
- Coincident indicators confirm what is happening now. They include factors like employment levels and retail sales. These metrics reveal the activity of areas or regions.