Economic indicators

Economic indicators are pieces of economic and financial data which are made know to the pulic by either the private sector or the governmnet. These informations which are published regularly help market observers in monitoring the situation of the economy. With the significance of these data, market prices can be greatly affected by volumes and prices tend to move in the direction of the effect.

Fundamentalist therefore keep their ears open, to get these data and information, so that trade positions can be decided.

Economic indicators have the ability to bring about great volumes of positions, and therefore move market prices in a particular direction. In order to keep track of these data, you must have a detailed information on dates and releases of these data, and how they can affect prices.

Keeping track of these data of economic indicators can enable you make meaning out of some irrelevant and unexpected price movement in the market.

Example of these indicators are as follows:


1. The Gross Domestic Product (GDP)
With the use of GDP, traders can know the pace of a country's growth, and this is one of the major indicators of fundamental analysis.


2. Industrial Production
This shows the strength of a country's industrial ability. The companies, factories, industries, and their uses are all measured in this indicator.


3. Purchasing Managers Index (PMI)
This indicates a country's manufacturing sistuation. These situations are export orders, import orders, prices of commodities, employment, and many others. This indicator is also divided into 2, which are the manufacturing and non-manufacturing sub-indices.

Other indicators includes Producer Price Index (PPI), Consumer Price Index (CPI), Durable Goods, Employment Cost Index (ECI), Retail Sales, and Housing Starts.