Economic Indicator Forecast
An economic indicator is a statistic of the current status of the economy. This can predict how the economy may perform in the future. Investors and other private or government organizations use this information as a tool to make business decisions. By gathering historical data about the economy and comparing it to current trends, one can compile a snapshot of economic fluctuations. The direction of an indicator may vary according to changes in the economy. The indicator can be leading, lagging, or coincident. Leading indicators are changes before the economy has recognized the changed. Lagging indicators do not change until a few quarters after the economy has change. Coincident indicators move at the same time as the economy (The Library of Congress, 2005). Some of the common indicators are GDP, Unemployment Rate, Inflation Rate, Capacity utilization, Auto sales, and Personal income. As the explanation of these six indicators will be use to forecast the future of the economy, the trend of these indicators will also be used to evaluate the economy's historical and future outcome.
Inflation Rate
The Congressional Budget Office (CBO) projects that inflation, as measured by the year-to-year change in the consumer price index for all urban consumers (CPI-U), is projected to decline from 2.8% this year to 2.3% next year. Rates of inflation for food and energy prices, which increased during the first half of this year are expected to be moderate. This should keeping overall inflation lower than in the recent past. In addition, the underlying rate of consumer price inflation is expected to be relatively stable, averaging slightly above 2% over the next year and a half (Congressional Budget Office [CBO], 2007).
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