How can you get an insight about financial activities that directly or indirectly affects the value of a country's economy, which is reflected in it's currency strength?
Economic indicators play an important role in providing us the access to information about a country's economic value
let's provide a simple explanation about an economic indicator
The assess into the complex nature of economic activities is made simple by economic indicators
An economic indicator is an economic statistic data use to assess the good condition and performance of a specific economy and also the global economy.
Economic Indicators provide valuable insight about different aspects of an economy, which includes economic growth activities, inflation, economic stability and consumer's confidence.
let's do some simple explanations on economic indicators
Economic Growth:
Economic Indicators shows you how an economy is doing, it will measure the speed at which an economy is growing. This depends on the Gross Domestic Product ( GDP ) or unemployment rate of a country, that has impact on its currency value.
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Inflation:
Economic Indicators follow up price changes with respect to time. This can help by providing insight into inflation rise and fall and also predicting over time trends.
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Economic Stability:
Economic Indicators can tell us about the possible risk in an economy be it country's economy or global economy. They indicate high level loses and dept levels.
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Consumer's confidence:
Economic Indicators check on the consumer spending character and detailed sentiment.
Unemployment Rate:
Unemployment rate can be defined as the percentage of the labor force that don't have a job and actively searching for work. If the unemployment rate is low, this signals a good Economic strength.
Inflation Rate:
The change in price rates of goods and services over a time period.
A decline and stable inflation rate is good for high economic value. Low and stable inflation is considered good.
Gross Domestic Product ( GDP ):
Gross Domestic Product is the value of goods produced and services rendered or offered within a country with respect to time.
An increasing level of GDP will result to a strong economic growth.
Retail Sales:
This shows the total value of goods purchased by consumers over a period( annually) It could be measured within three months, six months and yearly time frame. This gives information about consumer's healthy spending.
A positive character in spending plays an important part in economic activities indicating a strong economy.
Consumer Price Index ( CPI ):
Consumer Price Index play an important part in measuring inflation. It keeps record of changes in price paid by consumers for a bunch of goods and services provided.
Trade Balance:
This can be described as the difference between country's imports and exports economic activities.
A trade surplus will occur when the country's exports is higher than it's imports. This can strengthen the country's economy.
A higher imports over exports will reduce the country's economic strength.
List Of Economic Indicators:
Business Groups Or Organization:
Business groups or organization make use of economic indicators to understand market conditions before making investment plans and decisions for short and long term investments.
Policymakers:
Policymakers like government and central banks make use of economic indicators to get an insight about the economy and consider how to take informed decisions about fiscal and monetary policies.
Investors:
They use economic indicators as a tool to understand the market conditions.
Investors analyze economic indicators which helps them to make investment decisions.
It shows investors a good economic conditions favourable for investments in bonds, stocks, currencies, commodities and other financial instruments.
Economic Indicators Are Used By:
Economic Indicators are not reliable or perfect predictors, but they can help you gain valuable insight about the complex nature of the economy.
Economic Indicators help individual and organizations to make definite informed decisions about an economy, also it's financial activities.
Economic Indicators are not perfect predictors, they must be used with others financial technical analysis system for better results
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