Monday, August 17, 2009

MACROECONOMIC INDICATORS

  • Macroeconomic indicators characterize the level of economic development and indicate either economic growth or a decline. They are also used for price tendency forecasting purposes.
    The main macroeconomic indicators are:
    Consumer Credit
    The volume of all types of public credit. The volume of consumer credit varies seasonally and achieves significant growth over major holidays (New Year's Day, Christmas). The increase has a positive impact on the country's economy andleads to an increase in the national currency rate. Consumer credit data is published on the 7th day of every month at 20:00 GMT in the United States and at the end of each month at 9:30 in the UK.
    Consumer Price Index (CPI)
    Indicator showing the change of value of the consumer basket of goods and services. The index was first calculated in the US. It is calculated using average items chosen by residents. The index has a greater impact on the calculation of the cost of living of citizens and is also an inflation indicator. According to the index rising interest rates begin to rise. Core CPI is the Consumer Price Index excluding food and energy. It serves as an addition to the Consumer Price Index. Core CPI and CPI are issued in the middle of each month at 13:30 GMT.
    Current Account Balance
    The ratio of payments from foreign countries and payments abroad. If the incoming funds exceed the outgoing, the balance is active (surplus), otherwise it is passive (shortfall). An active balance has a positive effect on the growth rate of the national currency. In the United States the data is published quarterly in the middle of the month at 15:00 GMT, in Japan - in the middle of each month at 23:50 GMT; in the Euro zone after the 20th day of each month at 9:00 GMT.
    Export
    The value of export goods and services for a specific period of time. Monthly changes of this indicator are generally tracked in percentages and compared with the similar import data. Export data is issued during the third week of each month on Thursdays at 13:30 GMT.
    Gold and Foreign Currency Reserves
    Country gold and currency reserves held by the Central Bank or Financial bodies. Large reserves of foreign currency and gold represent the level of security and the benefits of investing in the economy of the country.
    Gross Domestic Product (GDP)
    The total cost of all goods and services produced by residents and non-residents in the country. The first estimates of GDP were made in the USA. Being an indicator of changes in the cost of goods and services within the country for a certain period, the GDP reflects the growth rate of the economy.The GDP is calculated as the sum of consumption volumes, investments, government spending and exports with imports subtracted. GDP growth characterizes the state of the economy, and the growth in comparison with other countries indicates the benefit of capital investment in the economy of this country. The data is published quarterly in the following order: advance-provisional (revised) - final.
    Import
    The cost of the volume of imported goods and services for a specific period oftime. Monthly changes in the indicator are generally tracked in percentage and are compared with similar export data. Data on imports is issued during the third week of each month on Thursdays at 13:30 GMT.
    Industrial Production
    Industrial output of the country and its changes. It is composed of mining and manufacturing industry volumes, the forest and public sectors as well as the production of electricity are also taken into consideration. The indicator reflects the level of the economy, but does not determine the direction of its development. An increase in value of this indicator leads to the growth of the national currency rate. In the UK and Germany, the data appears in the second decade of each month at 9:30 and 11:00 GMT; in the United States - in mid-month at 14:15; in the Euro zone on the 20th day of each month, at 11:00; in Japan - at the end of the month.
    Producer Price Index (PPI)
    The indicator of the average level of price change for raw materials andfinished products, the cost of which also includes the cost of labor. A more accurate figure is obtained by exclusion of food and energy industries (PPIexcluding food and energy). The index does not take into account the price of imported goods and services. The growth of this indicator leads to the growth of cost inflation: the cost of production increases, while the prices do notchange, which leads to an imbalance in production. Monthly figures issued one week after "Nonfarm payrolls" at 13:30 GMT.
    Retail
    Changes in retail sales volume, which are determined by consumer demand. In index values the sales of all kinds of goods are taken into account. The most volatile estimate is the sales of automobiles, therefore the most reliable data is calculated without this aspect. The increase in retail sales has an impacton the growth of the national currency rate and on the country's economy as a whole. This data is published in the middle of the month at 13:30 GMT.
    Trade Balance
    The ratio of imported and exported goods. The balance is active if the export goods costs exceed the import goods' costs (surplus), otherwise the balance is passive (shortfall). An active balance has a positive effect on the growth rate of the national currency. In the United States, the data is issued in the middle of the month at 13:30 GMT; in Japan - in mid-month at 23:50 GMT; in the Euro zone in the last decade of each month at 11:00 GMT; in Germany - in the first decade of each month at 7:00 GMT; in the UK - in the first decade of each month at 9:30 GMT.
    Unemployment Rate
    The average number of unemployed citizens over 18 years of age relative to the total labor force. Only persons who are registered as unemployed are taken into account. This indicator first appeared in the 1930s in the United States during the Great Depression. A low unemployment rate indicates a large number of citizens employed in the production of goods and services. An increase in unemployment results in lower GDP: employment in the production of goods is lower, hence, production declines. In the United States this data is published along with the"Nonfarm payrolls" at 13:30 GMT. In the Euro zone the data is available in the first decade of each month at 11:00 GMT, and in Japan - in the last decade of each month at 23:50 GMT

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