Internationally, the United States is considered as the most powerful and the largest economy as per the current economic indicators and the economy growth in 2011. The US economy is hugely based on financial market behavior where business firms and private individuals make the decisions. There are a few key economic indicators that predict the future of a particular economy. Economic indicators which are important are Inflation, Gross Domestic Product (GDP), Employment and Unemployment etc.
These indicators should achieve the main goal set by the Federal Reserve of putting monetary targets for economy growth. The current economic indicators and the economy growth in 2011 predict the growth of economy in the coming future. When the recession started, the current economic indicator changed to negative. This was a sure sign of economic downfall. Therefore, the economic health of the country is greatly affected by the current economic indicators.
The definition of economic health means the business growth, employment rate, currency value and many other things. So, for predicting the future it is of great importance to study the economic indicators of the current times. At present the statistics show that Gross Domestic Product of USA shows $ 48,000 per capita. As per the report of Economic Analysis Bureau there was an increase of 2.6 percent annual Gross Domestic Product (GDP) during the 3rd quarter of 2010. The current economic indicators and the economy growth in 2011 depict that jobs and business have grown substantially.
The rise in GDP is an indication that the business firms are hiring employees and investing. These indicators are basically government released statistics which indicate health and growth of the country especially in the economy front. They influence the currency value of the country. Indicators based on the types of predictions consist of 3 kinds.
Coincident indicator: This indicator occurs in cycle with any economic event. It happens simultaneously with the conditions that it signifies. Company payrolls are an example of this coincident indicator. This is because the payments are made and simultaneously it increases the local economy. Personal income is another example. Strong economy will coincide with high rates of personal income. Although they cannot predict the events of future yet they can change with economy and time of stock market.
Leading indicator: These are the events which take place exactly before the economic shift. For the forecast of future events, they are very instrumental. Immense accuracy is exhibited by the leading economic indicator within the finance world. Bond yields are the example of this indicator.
Lagging indicators: The indicator that basically follows event is called lagging indicator. Generally, it is an event that occurs after the happening of corresponding economic cause. For instance, amber light can be said as lagging indicator intended for green light. This is because it trails the green light. The example of this indicator is unemployment. This is due to the fact that when there is an economic downfall the rate of unemployment increases. Hence, it can be concluded that the Current Economic Indicators and the Economy Growth in 2011 are co-related