Aggregate demand is the total quantity of goods and services demanded across all levels of an economy at a particular time and price level. It reflects the aggregate expenditure for 'everything that will be bought' in an economy.
Aggregate income represents the sum total of all incomes within an economy before adjusting for inflation, taxes, or types of double-counting. It is a fundamental economic measure essential for assessing the economic health and output of a nation.
The Balance of Payments (BoP) is a comprehensive account setting out a country's economic transactions with the rest of the world, divided into key sub-accounts such as the current account and the capital account.
The balance of trade measures the difference in value over a period of time between a country's imports and exports of merchandise. A favorable balance, or trade surplus, occurs when exports exceed imports, while an unfavorable balance, or trade deficit, occurs when imports outweigh exports.
A barometer is a selective compilation of economic and market data designed to represent larger trends. Common barometers include consumer spending, housing starts, interest rates, and prominent stock market indices like the Dow Jones Industrial Average and Standard & Poor's 500 Stock Index.
A bear market is a financial term used to describe a market where the prices of securities are falling or are expected to fall. This state of the market is often characterized by a decline of at least 20% from recent highs.
An overarching term that encompasses various elements that affect the general climate of the economy and political situation, thereby influencing the profitability and prosperity of businesses.
Capital Consumption Allowance (CCA) represents the allowance for depreciation included in the Gross Domestic Product (GDP). It accounts for around 11% of GDP and is subtracted to calculate the Net National Product (NNP).
The relationship between the value of capital and the output it produces in a given period, usually a year; the lower the ratio, the more efficiently capital is being used to produce goods and services.
A widely recognized measure of U.S. residential real estate prices, particularly focusing on changes in the price of single-family homes in specific cities.
The civilian labor force encompasses all individuals aged 16 or over in the United States who are not in military service or institutionalized and are either employed or unemployed but actively seeking and available for work.
Coincident indicators are economic indicators that coincide with the current pace of economic activity. They provide insight into the current state of the economy by measuring various key areas of economic performance.
A concentration ratio measures the proportion of total industry sales controlled by the largest firms within the industry, typically the top four or eight firms.
A leading indicator of consumer spending that gauges public confidence about the health of the U.S. economy through a survey of opinions on various economic factors.
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is a critical indicator used to understand inflation and the cost of living.
The Consumption Possibility Line represents the maximum amounts of consumption possible at varying levels of disposable income, or of Gross Domestic Product (GDP).
Consumption, Investment, Government expenditures (C&I or C&I&G) are key components of the Gross Domestic Product (GDP), used to measure a country's economic performance.
Core inflation is the measure of inflation which excludes certain volatile items, usually food and energy, to provide a clearer picture of the long-term inflation trend.
The Cost-of-Living Index is a tool that measures the relative cost of living over time or between different locations. It is typically used to compare the expense required to maintain a certain standard of living across various cities or countries.
Monthly data on national employment and unemployment, wages, and earnings across all non-agriculture industries, providing key economic indicators.
Cyclical demand refers to patterns of consumer demand for goods and services that vary cyclically over time, often in response to external factors such as seasons, economic conditions, or business cycles.
Demand-pull inflation occurs when the aggregate demand in an economy outpaces the aggregate supply, leading to an increase in the general price level.
Discretionary income is the amount of spendable income remaining after the purchase of physical necessities, such as food, clothing, and shelter, as well as the payment of taxes. Marketers of goods other than necessities compete for the consumer's discretionary dollars by appealing to various psychological needs, as distinguished from physical needs.
Disinflation refers to a decrease in the rate of inflation – a slowdown in the rate at which prices are increasing across the economy. Unlike deflation, disinflation is characterized by a reduction in the inflation rate over time, without causing a drop in economic output or employment.
Double-Digit Inflation refers to an inflation rate of 10% per year or higher, significantly impacting purchasing power, savings, and economic stability.
Dow Theory is a theory that a major trend in the stock market must be confirmed by similar movements in the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA). According to this theory, a significant trend is not confirmed until both Dow Jones indexes reach new highs or lows; if they do not, the market is likely to fall back to its previous trading range.
Durable goods refer to consumer and business products that are designed and expected to last for several years. These goods are critical indicators of economic activity and investment trends.
The economic growth rate is a key indicator of the increase in a nation's economic activity, represented by the annual percentage change in Gross Domestic Product (GDP). When adjusted for inflation, it is known as the real economic growth rate.
Economic indicators are key statistics that provide insight into the state of the economy. They help policymakers, business leaders, and investors make informed decisions about economic activities.
A division of the U.S. Department of Commerce that provides timely economic analysis, disseminates national economic indicators, and oversees the U.S. Census Bureau and the Bureau of Economic Analysis (BEA).
An exchange rate is the price of one currency in terms of another currency. It is a crucial element in the global economy, impacting international trade, investments, and the purchasing power of consumers.
The floating currency exchange rate, also known as a flexible exchange rate, is the movement of a foreign currency exchange rate in response to changes in market forces of supply and demand. The value of a country's currency is determined by market conditions rather than by any direct intervention by the central or national government.
Understanding fluctuation is crucial within the realms of finance, economics, and business operations. It encapsulates the variability seen in prices, interest rates, and broader economic indicators, often influencing decision-making processes for investors, businesses, and policymakers.
Full employment is a rate of employment defined by government economists to take into account the percentage of unemployed individuals who would not be employed regardless of the nation's economy. It is currently considered to be at 5.2% unemployment.
The General Price Level is an index that provides a measure of the purchasing power of money. It is used to gauge inflation or deflation in an economy.
The monetary value of all the goods and services produced by an economy over a specified period. GDP serves as a broad measure of overall economic activity and an indicator of an economy's health.
Real GDP is an inflation-adjusted measure of the value of goods and services produced by an economy in a specific period, allowing for meaningful comparisons across different years.
Gross federal debt refers to the total amount of debt that the federal government has accrued over time, encompassing both public and private holdings.
Gross National Product (GNP) is a financial metric that measures the total economic output of a country's residents, regardless of the geographic location of the output.
Headline inflation measures the total inflation within an economy, encompassing a broad scope that includes volatile items such as food and energy prices, offering an overall picture of price trends in the economy.
Hemline Theory is a whimsical idea suggesting that stock prices move in the same general direction as the hemlines of women's dresses. Short skirts are considered bullish, while longer dresses are seen as bearish.
A Home Price Index (HPI) is a measure that tracks the changes in residential properties' prices over time. It provides an overview of the housing market's price trends, pegged to a base value rather than indicating average or median home prices in dollar amounts.
The homeownership rate is the percentage ratio of owner-occupied dwelling units to total occupied dwelling units in an area. In 2010, the homeownership rate for the United States was 66.9%, indicating the proportion of all households owning the home in which they lived.
An essential economic indicator that measures the capability of an average household to afford a home in a specific region. Primarily used to assess housing market conditions.
An important economic indicator that offers an estimate of the number of dwelling units on which construction has begun during a stated period. The number of housing starts is closely related to interest rates and other basic economic factors.
An index lease is a rental agreement that mandates adjustments in rent based on a published record of cost changes, typically tied to an economic indicator like the Consumer Price Index (CPI).
An index of leading indicators is a composite index comprised of various economic indicators that are used to predict the future direction of the economy.
A general increase in prices in an economy, leading to a consequent fall in the purchasing value of money.
An inverted yield curve is an unusual financial phenomenon where short-term interest rates exceed long-term rates, often seen as a precursor to economic recessions.
The Labor Force Participation Rate refers to the portion of the population over the age of 16 that is either employed or actively seeking employment. This metric is a key indicator of the available labor supply and economic activity within a country.
Lagging Indicators are economic metrics that change after the overall economy has experienced a change. These indicators are observed to confirm trends in economic activity.
Leading Indicators are economic statistics that signal future changes in the economy before they occur, helping to predict economic trends and cycles.
An economy characterized by low levels of income, industrialization, and modernization along with low standards of living.
An observable pattern or direction in data that persists over an extended period. It can significantly impact decision-making and expectation setting in various fields like finance, economics, and business.
A key economic indicator representing the combined values of trade sales and shipments by manufacturers, as well as values of inventories and business sales. The inventory rates of change indicate the growth or contraction within the economy.
The Marginal Propensity to Invest (MPI) is a measure in economics that defines the proportion of additional national income that will be invested rather than consumed or saved.
A combination of goods, in statistically derived proportions, used to track price changes. It is used in such indicators as the Consumer Price Index (CPI), and the Producer Price Index (PPI).
A comprehensive summary and analysis of the daily activities of a stock exchange or other financial markets, including major stock indices, economic indicators, and notable events influencing the markets.
Market Timing refers to the strategic decision-making process of buying or selling securities based on economic conditions, interest rates, stock price directions, and trading volumes.
An economic measure that represents the sum total of the value of all capital and goods held within a nation. It encompasses the net value of all assets owned by residents and businesses of a country at a particular time.
A negative yield curve, also referred to as an inverted yield curve, occurs when long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality, often indicating an imminent economic recession.
Net Domestic Product (NDP) represents the Gross Domestic Product (GDP) of a country minus the depreciation of its capital goods, providing an indication of capital obsolescence and the investment required to sustain current economic output.
An empirical relationship between unemployment and gross domestic product (GDP), developed by economist Arthur Okun, which states that for every 1% increase in unemployment, there is a corresponding 2% decrease in the national GDP.
A peak represents the highest point of the business cycle in a particular phase of economic activity, typically characterized by maximum output, employment, and consumer spending.
A statistical term used to express a quantity as a portion of the whole, which is assigned a value of 100. Price changes are often reported as percentage increases or declines.
The Personal Consumption Expenditures Price Index (PCEPI) is a U.S. economic indicator that measures the average increase in prices for all domestic personal consumption. This index is based on data from sources such as the Consumer Price Index and Producer Price Index, and it is indexed to a base value of 100 in 2005.
A positive yield curve, also known as a normal yield curve, reflects a usual situation where interest rates are higher on long-term debt securities than on short-term debt securities of the same quality, indicating investor expectations for future economic growth.
Precious metals such as gold, silver, platinum, and palladium are highly valued for their intrinsic value, role in backing world currencies, aesthetic appeal, and industrial applications. Their prices are influenced by supply and demand, political and economic considerations, and global events.
A price index traces the relative changes in the price of an individual good, or a market basket of goods, over time. Common examples include the Consumer Price Index (CPI) and the Producer Price Index (PPI).
Price level refers to the average of current prices across the entire spectrum of goods and services produced in the economy. It is often utilized as a gauge to measure inflation or deflation by comparing it to previous time periods.
The Producer Price Index (PPI) measures wholesale prices across various stages of production and distribution before goods and services reach the consumer market. It is released monthly by the U.S. Bureau of Labor Statistics.
Public Sector Net Cash Requirement (PSNCR) refers to the amount of money that the government needs to borrow in a specified period to meet its expenditures and obligations, after accounting for its income.
The rate of inflation measures the percentage change in the price level of goods and services over a period, indicating how much prices have increased or decreased, reflecting the economy's health.
The Retail Price Index (RPI) is a measure of inflation published monthly by the UK government. It indicates the rate of price change for a fixed basket of goods and services, which reflects the spending habits of households.
Monthly data that track U.S. sales, changes from previous periods, and areas where sales rose or fell. This metric measures personal consumption across retail industries, excluding autos, and tracks consumer spending trends.
The S&P/Case-Shiller Index, also known as the Case-Shiller/S&P Home Price Index, is a widely respected measure of the U.S. residential housing market. It provides crucial insights into home price trends across major metropolitan regions, thereby influencing both market participants and economic policy makers.
The savings ratio, also known as the savings rate, is a financial metric that measures the proportion of disposable income that individuals or households save rather than spend on consumption. This ratio is typically expressed as a percentage and reflects the preference balance between present and future consumption.
A statistical procedure applied to time series data to eliminate the effect of seasonal variations, providing a more accurate representation of underlying trends and cyclical movements.
Seasonal unemployment refers to joblessness that is expected at certain times of the year due to predictable and recurring variations in demand for labor. It commonly impacts industries like tourism, agriculture, and retail.
The Standard & Poor's Case-Shiller Home Price Index tracks changes in the value of the residential real estate market, measuring the health and fluctuations in property values in various regions across the United States.
A measure of the quality and quantity of goods and services available to individuals and households within an economy, which reflects the overall well-being and comfort level.
In economics, 'stock' represents a quantity measured at a particular moment in time, while 'flow' represents a quantity measured over a specified period.
Structural Unemployment is a type of unemployment caused by a mismatch between the skills that workers in the economy can offer and the skills demanded by employers.
Terms of Trade (TOT) is the economic concept that reflects the ratio between the prices at which a country sells its exports and the prices it pays for its imports. It indicates the relative efficiency of trade for a nation and can significantly impact its economic well-being.
The unemployment rate represents the percentage of the civilian labor force that is actively looking for work but is unable to find jobs. This rate is compiled by the U.S. Department of Labor, in cooperation with labor departments in all states, and is released to the public on the first Friday of every month.
An essential measure in economics and business that calculates the cost of labor required to produce one unit of a good or service.
A V-shaped recovery refers to a sharp rebound in economic activity where the economy experiences a steep decline followed by a rapid and vigorous recovery, typically measured by gross domestic product (GDP) growth.
The velocity of money refers to the frequency at which one unit of currency is used to purchase domestically-produced goods and services within a certain period. It is essential in understanding the health and efficiency of an economy.
The Wholesale Price Index (WPI) measures and tracks the changes in the price of goods in the wholesale market, or in other words, the price of goods that are sold in bulk, or wholesale, typically to retailers.
