Financial Analysis. Lesson 14. Economic Indicators and Their Impact on Financial Markets

Financial Analysis. Lesson 14. Economic Indicators and Their Impact on Financial Markets

1. Economic indicators are metrics that show the health of the economy.

2. Gross Domestic Product (GDP) measures the total output of a country’s economy.

3. Unemployment rate reflects the percentage of people actively seeking work.

4. Inflation rate tracks the general rise in prices over time.

5. Consumer Price Index (CPI) measures the average change in consumer prices.

6. Producer Price Index (PPI) shows price changes from the producer’s perspective.

7. Interest rate represents the cost of borrowing and affects investment decisions.

8. Monetary policy involves central bank actions to control money supply.

9. Fiscal policy refers to government spending and taxation strategies.

10. Trade balance compares a country’s exports to its imports over time.

11. Budget deficit occurs when government spending exceeds revenue generation.

12. Yield curve shows the relationship between interest rates and bond maturities.

13. Purchasing Managers’ Index (PMI) gauges manufacturing and economic activity levels.

14. Retail sales report tracks consumer spending trends within the retail sector.

15. Housing starts measure the number of new residential construction projects.

16. Labor force participation rate indicates the percentage of active workforce.

17. Exchange rate is the price of one currency relative to another.

18. Balance of payments records all transactions between a country and others.

19. Jobless claims measure new applications for unemployment insurance benefits.

20. Core inflation excludes food and energy prices for stable inflation measure.

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Technical Examples:

1. CPI analysis helps evaluate inflation impact on purchasing power.

2. Yield curve analysis aids in understanding interest rate expectations.

3. PMI provides insight into economic activity and manufacturing strength.