1 EconomicIndicator Analysis Rajaram

An economic indicator is data that can suggest whether the economy is expanding or contracting. A leading indicator can be an index, stock, report or other measurement that signals the economy or market's direction in advance. Leading economic indicators are statistics that precede an economic event. They are very useful in predicting what will happen in the economy because leading indicators have the potential to forecast where an economy is headed. It allows fiscal policymakers and governments to make use of them to implement or alter programs in order to ward off a recession or other negative economic events. Leading economic indicators reveal which aspects of the economy are showing relative strength. For example, if multiple variables such as payrolls, exports, and the purchasing managers survey are all rising, investors can expect economic growth to remain steady or even rise in coming quarters -- which is always a good thing for stocks. That's a trend that individual traders can support.
Leading economic indicators can also send you clues regarding inflationary or deflationary pressures. If the economy is starting to fire on all cylinders, investors may grow concerned that inflationary bottleneck pressures will emerge, forcing the Federal Reserve to push up interest rates. Rising rates can become a headwind for the stock market if they rise too high. (i.e., Prime Rate above 5%). Conversely, a fast-dropping set of leading economic indicators could signal interest rate cuts in the future and that’s how the leading economic indicators work. There are numerous leading economic indicators and I have listed few of them below:
Stock Market, (2) Interest Rates, (3) Durable Goods Report, (4) Retail Sales,
(5) Manufacturing Activity, (6) Consumer Confidence Index, (7) Purchase Managers Index, (8) New Residential Housing Report, (9) Jobless Claims Report & (10) Mutual Fund Flows. To further expand on leading economic indicators, I have chosen