ECONOMIC INDICATORS

Economic indicators



Economic Indicators

Requirement: 1

Following are the six economic indicators that are going to be discussed in the course of the study in context with the American economy which are as under.

Real GDP Growth

Consumer Price Index (CPI)

Industrial Production

Interest Rates

Change in Non-Farm Payrolls

Unemployment Rate

Real Gross Domestic Product (GDP) Growth

Gross domestic production is one way to measure the size of the economy. Gross domestic product calculates the value of goods and services produced locally by utilizing existing resources in the country with in a specific time period. The Real Gross Domestic Product or Gross Domestic Product in volume, is a measure of gross domestic product based on the change in real GDP of one period to another (usually a year or a quarter), measured with prices constant. The evolution of GDP linked to the inflation removed as well, allowing a measure of the “real” economic growth. Real GDP actually used to measure GDP growth a year to year, nominal GDP remains the reference measurement data for the long term.

Years

Real GDP rate

2008

1.1

2009

-2.6

2010

2.8

2011 (1st quarter)

1

The real GDP for the first quarter of 2011 is at 1% and, it expects to grow further. In the previous, it was at 2.8 %. The current real GDP trend is raising and a positive trend and, the current trend suggests a healthy economic growth in the near future of the country.

Consumer Price Index (CPI)

The consumer price index (CPI) measures changes in the average price level of goods and services consumed by households, weighted by their share in consumption average household. The consumer price index (CPI) is the main indicator of inflation, or the rate of change in prices in a given country. CPI (Price Index Consumer) compares all the prices of a year to one year in particular, which set as 100% (Mark, 1998). The most commonly quoted inflation measure is the consumer price index (CPI), which measures the prices paid by urban consumers for a representative basket of goods. The primary use of the CPI is to adjust income and expenditure streams for changes in the cost of living. The CPI index is a type of moving Laspeyre's aggregate price index, which uses the base year quantities as weights. This index shows how much a basket of goods produced in the base year (say, the year 2009) would have cost in any given year of interest.

Years

CPI

2008

3.80%

2009

-0.40%

2010

1.60%

2011 (1st Quarter)

3.80%

The consumer price index has witnessed an increase of 0.4 % in august 2011. The trend analysis of the suggests that it is following a continuous increasing trend which is not a positive outlook as it denotes the buying power of the people are decreasing. However, by keeping in view the other economic indicators it expects that the CPI will decrease in the coming years.

Industrial Production

The industrial production index is amongst one of the important economic indicators that used frequently used to gauge the economic performance of the country. The industrial production index updated on a monthly basis and, it measures the monthly evolution of the productive activity ...