Monitoring the status of current economic trends is an important part of planning your business, your investments, and your overall financial goals. Data is often compiled by government sources like the Department of Commerce, the Department of Labor, the Bureau of Economic Analysis, and a number of regional and local economic agencies. Many of these economic indicators are routinely reported in the news as good identifiers of current economic trends in the U.S. and are used to track the general direction of the economy from financial quarter to financial quarter.
Track the gross domestic product numbers from the Bureau of Economic Analysis. The gross domestic product (GDP) is a measure of the output of goods and services produced by labor and property in the U.S. and the market value of these goods and services. Gross domestic product can be thought of as the sum of consumption of goods and services, investment activity, government purchases, and net exports; that is, exports minus imports. It is considered one of the most important economic indicators because it signals the direction of all economic activity within a nation’s borders. It also measures the standard of living within a nation’s economy.
Watch the Consumer Price Index, which is one of the indicators that the Federal Reserve uses to determine its decisions on U.S. monetary policy. It is a compilation of data that measures the change in price of a representative selection of goods and services that a typical consumer purchases. Any acceleration or deceleration of prices signals inflation or deflation. The number comes out monthly from the U.S. Department of Labor.
Chart Non-farm Payroll Employment numbers, which is an estimate released by the Department of Labor on a monthly basis that tracks the growth of employment in non-farm business establishments and government agencies. Growth in these areas signal changes in the future pace of overall growth in the economy. Average hourly earnings changes provide data about conditions in the labor markets which also give significant information about what is happening in the economy.
Keep an eye on the Purchasing Managers’ Index. This index is a hybrid indicator in that it identifies the rate of change from month to month not only of manufacturing activity within the economy, but in consumer confidence. It measures purchasing managers' projections for future manufacturing activity. This can be a very sensitive measurement that reflects current customer orders for large goods and companies' expectations for future inventory. Any slippage in the purchasing managers’ numbers historically means a slowdown in the general economy. The data is released monthly by the Institute for Supply Management
Many of these indexes are reported regularly in financial newspapers like the Wall Street Journal and Investor's Business Daily.