Economic Indicators

Definition

Economic indicators are statistical data that provide insights into the overall health and performance of an economy. They help economists and policymakers assess the current state of the economy, predict future trends, and make informed decisions.

Analogy

Think of economic indicators as a dashboard in a car. Just like how various gauges on the dashboard (speedometer, fuel gauge, temperature gauge) give you information about your car's performance, economic indicators give you information about the performance of an economy.

Related terms

Gross Domestic Product (GDP): GDP is the total value of all goods and services produced within a country's borders during a specific period. It is one of the most important economic indicators.

Unemployment Rate: The unemployment rate measures the percentage of people in the labor force who are actively seeking employment but unable to find jobs.

Consumer Price Index (CPI): The CPI measures changes in the average prices paid by consumers for a basket of goods and services over time. It helps track inflation levels.