Economic data refers to the quantitative measures used when describing an economy. An economic indicator is a data piece or statistic used to predict economic activity. Economic indicators are used to analyze the effectiveness of economic actions or implementations and are also used to predict economic performance. Economic indicators are used to study business cycles and to provide insight on earning reports and other economic summaries. Economic indicators can be procyclical, acyclical, and countercyclical depending on whether they are positively, not, or negatively correlated to GDP respectively.
Economic indicators are categorized into three main types. The first type is a leading indicator that aims to predict the direction of the economy. The stock market and manufacturing activity are examples of leading indicators. The second type is a coincident indicator, which correlate with economic activity. The third type of economic indicator is a lagging indicator, which appears after related economic activity. The unemployment rate is an example of a lagging indicator.
Economic indicators (especially leading indicators) are extremely important to the study of economics as well as our own lives. They are used to predict the future about our economy and are incorporated in making decisions about investments as well as the government’s decision about interest rates. The gross domestic product (GDP) report is one of the most important indicators because it is the largest measure of the economy’s state.