Global economic indicators
Demo only. More content is available in Live mode.
Indicator's name |
Level of importance |
Index change |
Currency change |
|
GDP, Gross Domestic Product |
|
increase |
growth |
Description
It is the main indicator of the current state of the economy. It consists of: GDP = C + I + S + E – M, where C – consumption, I – investment, S – government spending, E – exports, M – imports. Consumption makes up the biggest part of the GDP, e.g. in the US it amounts to 70% of the GDP, in Japan to more than 60%. Usually it is presented quarterly, and is published 3 times as following: advance, provisional (revised) and final figures. The GDP can be presented as a percentage change to the previous period or as an absolute number, which is the total amount of all goods and services produced in the economy during a specified period. Has a significant effect on the market. The growth of the GDP leads to currency strengthening.
|
|
CPI, Consumer Price Index |
|
increase |
decline |
Description
It is the main indicator of the level of inflation in a country. It represents a change of the price for the fixed basket of goods and services: food, transport, utility costs, health services etc. There are two variations of the index: general CPI and main (Core) CPI, which excludes food and energy costs and is considered to be more precise. Each index is published twice as preliminary and final figures. The accepted level of inflation is around 2-3%, its increase leads to currency devaluation. However, low levels of inflation can also harm the economy, negatively affect consumption and manufacturing and cause currency depreciation. Usually, central banks have their inflationary targets that they use to correct their monetary policy. The index is published monthly.
|
|
Interest Rate, Federal Funds rate, Official Bank rate, Official Cash rate |
|
increase |
growth |
Description
These are the rates set by central banks (in the US, by the Fed Open Market Committee) to conduct transactions with other financial institutions of the country. Interest rates help central banks influence retail banks interest rates, inflation and value of national currencies. The interest rate increase leads to the inflation reduction and currency strengthening, while rates decrease causes the opposite. The interest rate change is decided upon by the central bank board (in the US, by the Fed Open Market Committee) and can be done several times during the year.
|
|
Unemployment rate |
|
increase |
decline |
Description
It represents the ratio of the number of unemployed individuals over 18 year old to the total number of labor force in the country. Only those registered as unemployed are counted. The figure has a significant effect on the market. The normal level of unemployment is thought to be around 4-5%. For regulators, unemployment rate is one of the target measures when considering monetary policy changes. The figure is published monthly.
|
|
Industrial production |
|
increase |
growth |
Description
Industrial production is one of the main indicators of the current state of the economy. The index represents a change of the volume of industrial production and utility services in the country. It includes manufacturing, mining and energy. The growth of the index leads to currency strengthening. It is published monthly.
|