Economic indicators regularly release government statistics that show the growth and health of a country, especially its economy. The economic indicators mostly affect the value of a country’s currency. This is the main statistic that shows the direction of the economy. Trade deficit, gross national products (GNP), industrial production, unemployment rate, inflation rate, factory utilization rate and business inventory are examples of economic indicators.
Economic indicators are used to analyze the economic behavior of a country and predict which economic way will act in the near future. On the basis of the type of prediction of economic indicators consist of three types:
· Coinciding economic indicators
· Leading economic indicators
· Lagging indicator
Coinciding economic indicators occur together with economic events. This indicator occurs at a time that is roughly the same as the conditions they indicate. An example of a paradigm is a payroll company. This payrolls are indicators that coincide because they make payments and simultaneously improve the local economy. Personal income is also an indicator of coincidence for the economy. A high level of personal income will coincide with a strong economy. Indicators happen to not predict future events but change with changes in time and the stock market economy.
Lagging indicators are one that follows an event. This indicator is an event, which occurs after the right cause of the economy occurs the same as the yellow light is a lagging indicator for green lights such as the yellow green trail. The unemployment rate of a country is an example of a lagging indicator because such an economy or the company expects a decline in the economy, the unemployment rate increases. The media is also an economic indicator lagging behind the news always reported a few hours before the actual economic fluctuations they appoint. Lagging indicators are very significant because of their ability to confirm that a pattern occurs or will occur.
The main indicator is the event that happens right before the economic shift. The main indicator is instrumental in predicting future events. The main indicators show great accuracy in the financial world. Examples of the main indicators are the results of bonds. Bond yields are the main indicators of the stock market because on behalf of these bond traders anticipate and travel state and economic market trips.
But in the economy, the classification of several factors will be debated. For example, according to some federal reserve people are the main indicators while for others it is an indicator that is left behind. Market trends show that the market reacts to the Federal Reserve that changes interest rates or that the Federal Reserve changes interest rates only responding to the market. Seeing the practical Federal Reserve can be seen as a leading indicator and lagging.