Question

Go to a financial news source (a web search will pull this up) to find out the status of the leading economic indicators at this time. Make note of your findings.

How does the information inform you as an investor? Share with your classmates the economic indicator you think might be the most important for investing decisions, and why you think this indicator is important.

Answer 1

Following are the economic indicators, I think, are the most important -

1. GDP of a country: GDP is considered to be one of the key indicators of an economy's progress & has direct connection to monetary & fiscal policies of a country.

2. Stock index: The index is designed to measure changes in the stock prices of component companies. It is used as a measure of the nation's stock of capital, as well as a gauge of future business and consumer confidence levels.

3. CPI (Consumer Price Index): CPI gives us the fair look at changes in prices of consumer goods & services bought by households of a country.

4. Employment data: Though it's a lagged indicator yet reflects strongly on an economy. It indicates how many of the qualified & willing people are out of job.

5. Current account deficit: If a country's imports exceed export then the country is said to have a CAD. Steps the government takes to rein in CAD might be of interest to Investors.

6. Consumer sentiment: Usually, rising consumer sentiment means they're optimistic about the economic progress, they've jobs & are more willing to spend & invest.