Question

Consumers, investors, and business owners rely on economic forecasting indictors. They make decisions based on these indicators. However, what are some of the more important criticisms of the forecasting ability of the leading economic indicators? What must consumers, investors, and business owners be cautious of moving forward with decision making?

Answer 1

Economic forecasting indicators analyze, forecast the overall health of an economy. The judge the investment futures depending their interpretation.

Thus each and every firms, consumers and investors have their own economic forecasting indicators which they will take decisions depending these indicators.

Thus we can understand the usage of this tool in economy.

The main criticism on economic indicators they may not be always true. This forecast indicators are done on the interpretation of present data. No body know the future what will happen next. It is like a 50-50 probability. If your forecast is correct you earn profits. If it fails we loose. Thus relying only on this economic forecasting indicators is always a fault.

Consumers, investors and business owners should always takes to risks to succed in their business activities but they should a calculated risks by see that if there is a loss in their business they not get bankrupt and they should always check that if there is a loss in the business its impact should not be more so they should always plan in a such a ways that if losses occur it will be minimal.

Each business require different analysis in taking a decisions depending on the investment, market, demand etc. The ultimate aim is to earn profits in the business.