A
statistic that shows the
health and direction of the
economy. The economy can be roughly defined as "
how things
are going".
Some statistics that are regarded as key economic indicators
are employment, housing starts and sales,
manufacturing sales and inventories,
trade balances, personal debt and savings levels, consumer confidence ...
Economics (like modern physics) seems to the uninitiated
to be a form of voodoo at best and doubletalk at worst.
This is because the key ideas, which are simple, are
generally not communicated in a popular fashion.
You can check your own economic indicators, however,
and get an idea of what economists do on a larger
scale:
- unemployment: how many people do you know
who are out of work?
- housing starts and sales: how many people
do you know who are building or buying a home?
- consumer confidence: how long do you
hesitate before buying a luxury item, like a bigger
TV?
Economists look at the indicators and make
some sort
of diagnosis, often using words like
recession, inflation, depression,
growth. These words do have technical definitions,
but for your own
personal use you can take them this
way:
- Recession
- You have money, but it seems to disappear.
- Inflation
- You have a lot of money, but everything costs
a lot of money.
- Depression
- Prices are incredibly low, but no one has any money.
- Growth
- You've got money, you're spending it, and there
is no problem.