Introduction to Economics Johnstown High School Mr. Cox Economic Indicators Introduction to Economics Johnstown High School Mr. Cox

Economic Indicators Economic data used to interpret current or future investment possibilities and judge the overall health of an economy. Types of Indicators Leading Indicators: indicates future changes or trends in the economy (Building permits, retail sales, stock market activity) Lagging Indicators: indicates change in the economy after a particular pattern or trend has begun/happened ( unemployment, corporate profits and labor cost per unit of output) Coincident Indicators: occur at the same time as the economic trend (employment, real earnings, and the unemployment rate.) Examples Include: Consumer Price Index (CPI) Gross Domestic Product (GDP) and Gross National Product (GNP) Unemployment statistics

CPI (Consumer Price Index) Measure that examines the average of prices of goods and services in a “basket” CPI is calculated by averaging price changes for these goods Averages are compared over years to study trends in the economy Used to assess cost of living Used to identify periods of inflation or deflation Rise in CPI indicates a period of inflation

GDP and GNP Gross Domestic Product Gross National Product Value of products & Services produced within the territorial boundary of a country. Assesses the strength of a country’s local economy Can be calculated Per Capita (per person) or as a total to compare nations Value of Goods and Services produced by all nationals of a country (inside and outside of national borders) Assesses the well-being of nationals Usually calculated as Per Capita figure, can be calculated top compare nations Country with Highest USA ($17.42 Trillion). USA (~ $11.5 Trillion)

Unemployment Statistics High unemployment Rates Indicate that national economy is weak, generally… Must identify type of unemployment Structural or cyclical means growth could be coming Look for trends, is rate growing or shrinking? High employment (low unemployment) rates indicate that an economy is healthy People are working/earning money, therefore are spending Any rate above 10% is generally considered to be high, especially in developed countries