A Beginners Guide to Economic Indicators

A Beginners Guide to Economic Indicators An economic indicator is simply any economic statistic, such as the unemployment rate, GDP, or the inflation rate, which indicate how well the economy is doing and how well the economy is going to do in the future. As shown in the article How Markets Use Information To Set Prices investors use all the information at their disposal to make decisions. If a set of economic indicators suggest that the economy is going to do better or worse in the future than they had previously expected, they may decide to change their investing strategy. To understand economic indicators, we must understand the ways in which economic indicators differ. There are three major attributes each economic indicator has: Three Attributes of Economic Indicators Relation to the Business Cycle / EconomyEconomic Indicators can have one of three different relationships to the economy:Procyclic: A procyclic (or procyclical) economic indicator is one that moves in the same direction as the economy. So if the economy is doing well, this number is usually increasing, whereas if were in a recession this indicator is decreasing. The Gross Domestic Product (GDP) is an example of a procyclic economic indicator.Countercyclic: A countercyclic (or countercyclical) economic indicator is one that moves in the opposite direction as the economy. The unemployment rate gets larger as the economy gets worse so it is a countercyclic economic indicator.Acyclic: An acyclic economic indicator is one that has no relation to the health of the economy and is generally of little use. The number of home runs the Montreal Expos hit in a year generally has no relationship to the health of the economy, so we could say it is an acyclic economic indicator.Frequency of the Dat aIn most countries, GDP figures are released quarterly (every three months) while the unemployment rate is released monthly. Some economic indicators, such as the Dow Jones Index, are available immediately and change every minute. TimingEconomic Indicators can be leading, lagging, or coincident which indicates the timing of their changes relative to how the economy as a whole changes.Three Timing Types of Economic IndicatorsLeading: Leading economic indicators are indicators which change before the economy changes. Stock market returns are a leading indicator, as the stock market usually begins to decline before the economy declines and they improve before the economy begins to pull out of a recession. Leading economic indicators are the most important type for investors as they help predict what the economy will be like in the future.Lagged: A lagged economic indicator is one that does not change direction until a few quarters after the economy does. The unemployment rate is a lagged economic indicator as unemployment tends to increase for 2 or 3 quarters after the economy starts to improve.Coincident: A coincident economic indicator is one that simply moves at the same time the economy does. The Gross Domest ic Product is a coincident indicator. Â   Many different groups collect and publish economic indicators, but the most important American collection of economic indicators is published by the United States Congress. Their Economic Indicators are published monthly and are available for download in PDF and TEXT formats. The indicators fall into seven broad categories: Total Output, Income, and SpendingEmployment, Unemployment, and WagesProduction and Business ActivityPricesMoney, Credit, and Security MarketsFederal FinanceInternational Statistics Each of the statistics in these categories helps create a picture of the performance of the economy and how the economy is likely to do in the future. Total Output, Income, and Spending These tend to be the broadest measures of economic performance and include such statistics as: Gross Domestic Product (GDP) [quarterly]Real GDP [quarterly]Implicit Price Deflator for GDP [quarterly]Business Output [quarterly]National Income [quarterly]Consumption Expenditure [quarterly]Corporate Profits[quarterly]Real Gross Private Domestic Investment[quarterly] The Gross Domestic Product is used to measure economic activity and thus is both procyclical and a coincident economic indicator. The Implicit Price Deflator is a measure of inflation. Inflation is procyclical as it tends to rise during booms and falls during periods of economic weakness. Measures of inflation are also coincident indicators. Consumption and consumer spending are also procyclical and coincident. Employment, Unemployment, and Wages These statistics cover how strong the labor market is and they include the following: The Unemployment Rate [monthly]Level of Civilian Employment[monthly]Average Weekly Hours, Hourly Earnings, and Weekly Earnings[monthly]Labor Productivity [quarterly] The unemployment rate is a lagged, countercyclical statistic. The level of civilian employment measures how many people are working so it is procyclic. Unlike the unemployment rate, it is a coincident economic indicator. Production and Business Activity These statistics cover how much businesses are producing and the level of new construction in the economy: Industrial Production and Capacity Utilization [monthly]New Construction [monthly]New Private Housing and Vacancy Rates [monthly]Business Sales and Inventories [monthly]Manufacturers Shipments, Inventories, and Orders [monthly] Changes in business inventories is an important leading economic indicator as they indicate changes in consumer demand. New construction including new home construction is another procyclical leading indicator which is watched closely by investors. A slowdown in the housing market during a boom often indicates that a recession is coming, whereas a rise in the new housing market during a recession usually means that there are better times ahead. Prices This category includes both the prices consumers pay as well as the prices businesses pay for raw materials and include: Producer Prices [monthly]Consumer Prices [monthly]Prices Received And Paid By Farmers [monthly] These measures are all measures of changes in the price level and thus measure inflation. Inflation is procyclical and a coincident economic indicator. Money, Credit, and Security Markets These statistics measure the amount of money in the economy as well as interest rates and include: Money Stock (M1, M2, and M3) [monthly]Bank Credit at All Commercial Banks [monthly]Consumer Credit [monthly]Interest Rates and Bond Yields [weekly and monthly]Stock Prices and Yields [weekly and monthly] Nominal interest rates are influenced by inflation, so like inflation, they tend to be procyclical and a coincident economic indicator. Stock market returns are also procyclical but they are a leading indicator of economic performance. Federal Finance These are measures of government spending and government deficits and debts: Federal Receipts (Revenue)[yearly]Federal Outlays (Expenses) [yearly]Federal Debt [yearly] Governments generally try to stimulate the economy during recessions and to do so they increase spending without raising taxes. This causes both government spending and government debt to rise during a recession, so they are countercyclical economic indicators. They tend to be coincident to the business cycle. International Trade These are a measure of how much the country is exporting and how much they are importing: Industrial Production and Consumer Prices of Major Industrial CountriesU.S. International Trade In Goods and ServicesU.S. International Transactions When times are good people tend to spend more money on both domestic and imported goods. The level of exports tends not to change much during the business cycle. So the balance of trade (or net exports) is countercyclical as imports outweigh exports during boom periods. Measures of international trade tend to be coincident economic indicators. While we cannot predict the future perfectly, economic indicators help us understand where we are and where we are going.

How nurses can advance in their careers if they dont want to be nurses forever

How nurses can advance in their careers if they dont want to be nurses forever Sometimes we get so focused on our current jobs that we forget to focus on â€Å"the big professional picture,† which includes our entire career arc- from start to finish. The truth is, we should always think about our professional lives as a journey rather than a single destination and have a plan for the next rungs on our career ladders while we give our best effort on our current step. This includes all of the nurses out there. While being a nurse is an important and satisfying job that demands a great deal of focus and attention, and also offers professional challenges and options, nurses should also devote some time towards thinking about their full career journeys- and whether or not they want to be nurses forever.It isn’t uncommon for someone who’s traveled deep (or not so deep) into a career path to start thinking about other paths- many people who are mid-stream in their careers start thinking about making changes, often in an effort to take on new chall enges, build new skills, and expand their horizons. We should never feel â€Å"locked into† a career path just because we’ve been at it for several years. Career satisfaction is an important concept to strive for, and if you’re experiencing professional fatigue, malaise, or burnout on the job, it may be a sign that you might want a change.The prospect of a major career change or overhaul can be a scary one, but here’s some good news for nurses who may be dealing with this- nurses often have a wealth of valuable, transferable skills that they could use effectively in a variety of professional settings and scenarios.Nurses build a wide array of key skills during their tenures that they can use to their advantage in other professional roles. They are typically adept at problem-solving, planning, and organization in a variety of high-pressure situations. They build and routinely demonstrate critical management and leadership skills, and are usually quite effe ctive at time management. In addition, the nature of their work helps them build key people skills- it’s no surprise to learn that nurses possess excellent communication and teamwork abilities, and also demonstrate empathy towards others. What’s more, the unpredictable nature of nursing helps nurses become adaptable and flexible in all sorts of situations. All of these skills are useful in careers across industries and fields- whether in nursing or beyond healthcare. Many nurses also choose to obtain an advanced nursing degree, which allows them to pursue other career opportunities beyond nursing but within healthcare. Areas of specialization include nurse anesthetists, nurse attorneys, nurse researchers, and nurse midwives.Here’s the bottom line- if you’re a nurse who’s considering a career change, there’s a lot to be optimistic about. You’re likely equipped with a wealth of valuable experience and transferable skills that will serve you well in whatever career path you choose to pursue. Good luck!