The economic indicators, have the ability to measure the situation of the economic variables that are used to interpret the moment, analyze the situation, carry out prior monitoring of the fixed objectives and predict various behaviors in the future.
These can be applied to all types of situations, from the same person, then the family, the company and finally the macroeconomic variables of the state. The indicator of indebtedness for the individual, of the use of the installed capacity in the organization, of the expenses family and state inflation are examples of this type of indicator for each of the units of market.
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In this article you will find:
What are economic indicators for?
These indicators are data found in statistical values, which represent an economic reality in a direct and quantitative way. They refer to statistics that presume the measurement of a variable over the course of a certain period.
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These show the behavior of the main economic variables and are used to anticipate, correct and improve the results that are measured at the moment in the economy, whether of a company, state or at the level world.
Its interpretation serves to be able to know what the situation of the economy is and carry out projections, which is very important for any country. Taking this into account, a decision can be made on the basis of the economic nature or the fiscal policy, in addition to being a sign of caution for investors and agents of the economy.
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Characteristics of the economic indicators
The characteristics of these indicators contain the following qualities:
They are measurable
If they contain the data of the indicators, the data obtained from the variables can be compared depending on the relationship to the results.
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They have easy access
Your information has to be acquired regularly and frequently.
Relevance
It refers to the efficient indicator that is related to a more important objective.
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They are specific
The information obtained from the indicators must be direct so that it does not create confusion.
They are generic
This allows the indicators to be more relevant.
Classification of the main economic indicators
There is a wide variety of important indicators, however, the ones that have the most distinction within the use in the economy will be mentioned below:
Gross domestic product - GDP
It is the main indicator of the economy and of greater importance, this is because it has the ability to measure all the goods that are produced within the nation. Its measurement is done as a percentage on top of a quarterly and annual basis. The decrease in this percentage indicates a possible economic recession in the future.
The consumer price index - CPI
It is responsible for measuring economic inflation. This inflation can be defined as the excessive amount of dollars that can receive very low amounts of goods. It is measured through the consumer price index, which can measure inflation through the evolving calculations of the value of goods and services.
The producer price index - PPI
You can measure price changes in a certain group of goods at the wholesale level. This allows you to track changes in inflation of raw materials, such as raw materials that are raw materials. premium used by manufacturers, intermediates that are used for the productions of large products and those that are already finishes.
Employment indicators
They are related to the rate of unemployment, earnings measured per hour, and average time worked per week. These indicators generate information on the business environment and the number of organizations that are responsible for the payment of their workers.
Retail sales
It is an indicator that records the amount of economic expenses. Provides information on the economic amount that consumers spend on different goods and services in the market of an economy.
Consumer confidence
It refers to the most common indicator that generates the information individual consumers need to know about current economic conditions. It may happen that consumer mistrust frequently affects other indicators.
S&P 500 Stock Index
It is an index that is designed in order to measure any change that is generated in the prices of the various shares of companies. It is the indicator of the levels of business confidence, future consumers and the growth of business investments.
Benefits of economic indicators
Among the most important benefits are:
- They can provide the necessary value to be able to follow up on a certain event.
- They look for a way to measure projects to obtain efficient results.
- They support and provide the necessary performance for the achievement of the objectives, since they inform whether or not there is an approach to the goal to be achieved.
- They are clear, precise and exact indicators, having a minimum ignorance of the information that is handled.
Importance of economic indicators
These indicators are usually one of the most important parts of the economic system, especially in the states at the government level, since that they look for a way to relate and interpret these indicators, in order to act in advance in the face of possible changes in the future.
Among the most relevant points can be highlighted:
- They allow you to observe the results more closely from the decisions and actions taken.
- They are a means of favorable orientation to have the knowledge of how to improve the results of economic development projects.
- It facilitates the change in the measurement of an economic condition or situation over time.
- These are very important elements that can lead to a certain monitoring and evaluation of the economic development process of a given place.
