FISCAL CLIFF & ECONOMIC INDICATOR By: Claire Murray.

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Presentation transcript:

FISCAL CLIFF & ECONOMIC INDICATOR By: Claire Murray

-Top 10 Best Indicators -Why Are They the Best? -Consumer Price Index Economic Indicators

Top 10 Best Economic Indicators: 1. Real GDP 2. M2 (money supply) 3. Consumer Price Index (CPI) 4. Producer Price Index 5. Consumer confidence survey 6. Current employment statistics 7. Retail trade sales and food service sales 8. Housing starts 9. Manufacturing and trade inventories and sales 10. S & P 500 stock index

Why are they the top 10 best? 1. Real GDP: Federal reserves uses it and other related things to adjust its Monetary Policy. 2. M2 (Money supply): Federal reserves uses to find current economic standings. (Some economists use to predict cyclical recessions and recoveries) 3. Consumer Price Index (CPI): Best indication of inflation. 4. Producer Price Index (PPI): First inflation measure of the month. 5. Consumer Confidence Survey: Leading indicator of consumer spending. 6. Current Employment Statistics: Earliest indicator of economic trends released each month. 7. Retail Trade Sales & Food Service Sales: Measure consumers’ personal consumption throughout retail industries and they keep track of the growth of consumption spending. 8. Housing Starts: High sensitive to changes in mortgage rates (which interest rates effect). 9. Manufacturing & Trade Inventories and Sales: Main source of information on the state of business inventories and sales. 10. S & P 500 Stock Index: Designed to measure changes in stock prices of companies.

What is a Consumer Price Index (CPI)?  An index of the changes in prices paid by average consumers for retail goods and other items.

-Will this help our economy? -Will it create expansion or recession? -How will it effect the standard of living? FISCAL CLIFF

Will This Help Our Economy?  No, I believe that the fiscal cliff will cause a recession. cal-cliff-traffic-report/

Will it create expansion or recession?  Recession.  If the fiscal cliff isn’t avoided, the GDP will shrink.5 percent in  First ½ of the year: Tax hikes and spending cuts will make the GDP to shrink 2.9%  Second ½ of the year: GDP will slightly shoot up with a predicted 1.9% growth.  WHY? The fiscal cliff is worse than other years because of more payroll tax cuts and federal unemployment benefits.

How Will it Effect the Standard of Living?  I think it will definitely LOWER the standard of living.  But not to a point where our country would need to fret about it.  Fiscal cliff would LOWER it, but won’t LOWER it too much.

SOURCES:  Will_Cause_Recession_CBO_Warns Will_Cause_Recession_CBO_Warns 