Economic Indicators

The relationship between a business and a consumer is this: If a business has something the consumer wants and the consumer has the money to buy it,a sale will be generated and the business will profit from that sale. The leading economic indicators reported on the news are nothing more than measurements of the buying and selling activities of companies and the spending or saving activities of individuals on a national or international scale.

The stock market is not only affected by these indicators, but is also considered an economic indicator in its own right. The stock market is a primary barometer of the economic health of a nation and a part of the economy most sensitive to what is happening in all other areas. This is because consumer and industrial spending activities drive corporate earnings, which, in turn, drive stock prices.

In any given period, the stock market will rise and fall. Each time it rises or falls, individual stock prices are affected. When a stock rises and falls more than the average stock price, it is considered volatile. During times that stock markets rise, the country is generally experiencing a period of economic growth. Economic growth is marked by an increase in jobs, income levels, and goods and services produced and sold.

More detailed information on economic indicators can be obtained at:

http://www.whitehouse.gov/fsbr/esbr.html .

Home

footer for economic indicators page