Economic indicators are statistics that provide information about the overall economic health and performance of a country or region. These metrics are used by policymakers, economists, and analysts to assess economic conditions and make informed decisions. Economic indicators are typically classified into three main categories: leading, lagging, and coincident indicators.
Leading indicators are metrics that tend to change before the overall economy changes, making them useful for predicting future economic activity. Examples include stock market performance or building permits. Lagging indicators, on the other hand, reflect trends that have already occurred and can confirm patterns established in the economy, such as unemployment rates or GDP growth. Coincident indicators move in tandem with the economy, providing current data on economic activity, like industrial production or retail sales.
Common economic indicators include Gross Domestic Product (GDP), unemployment rates, inflation rates, consumer confidence indexes, and balance of trade. By analyzing these indicators, stakeholders can gain insights into economic cycles, facilitating better strategic planning and policy formulation.