Economic Indicator

An economic indicator is a piece of data or a statistical figure that gives insight into a country’s economic performance and overall health. These indicators are released regularly by governments and independent organizations. They help traders, investors, and policymakers understand trends in areas such as growth, employment, inflation, and consumer activity. Examples of common economic indicators include Gross Domestic Product (GDP), unemployment rate, Consumer Price Index (CPI), and retail sales.

Economic indicators are often classified into three types: leading, lagging, and coincident. Leading indicators, like new housing starts or manufacturing orders, give clues about future economic activity. Lagging indicators, such as unemployment rates, reflect changes that have already happened. Coincident indicators move in line with the economy’s current state. Traders watch these releases closely. They can cause significant market volatility, especially in the Forex market. Here, currency values are influenced by economic strength and outlook.

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