Economic Indicators
...les within this category are money supply, building permits, production, interest rates, manufacturing and trade – all leading indicators that help predict future aspects of an economy. There will be a focus of unemployment claims, stock market prices, money supply, interest rates, and consumer price index (CPI) leading indicators to be discussed of each section’s 3rd quarter statistics of the 2004 year. In any particular year, July, August, and September are the months that compose the 3rd quarter, however much can happen in that short period of time. An increase within the Consumer Price Index is displayed between the months of July and September of 2004; the CPI produced an 112.5 to 113.1 amplification. Yahoo!’s dictionary states the definition of a consumer price index as “an index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period; CPI may also be titles the cost of living index.” Products that were effected by the increase in prices were milk, fish, fresh fruits, rum and other cane spirits, gasoline, and other commonly used goods and services. The below table outlines division commodity categories, with enhancements that occurred throughout the 3rd quarter. Monthly Sub-Indices by Division of Consumption Expenditure, July - September 2004 DIVISION DESCRIPTION JUL 04 AUG 04 SEPT 04 01 Food/Non-alcoholic Beverages 112.2 112.3 113.2 02 Alcoholic Beverages & Tobacco 122.9 122.1 122.8 03 Clothing & Footwear 105.2 105.0 105.2 04 Housing, Water, Electricity, etc 106.6 108.4 108.4 05 Furnishings, Household Equip. 108.1 108.0 108.4 06 Health 117.7 119.1 119.1 07 Transport 112.5 112.2 112.2 08 Communication 133.9 133.5 133.5 09 Recreation & Culture 103.5 103.2 103.3 10 Education 111.7 111.7 111.7 11 Restaurants & Hotels 115.4 115.5 116.1 12 Miscellaneous Goods & Services 115.2 116.0 116.0 TOTAL 112.5 112.7 113.1 When observing the trends of the Consumer Price Indices for the months of July through September of the year 2004, its past history allows for future predictions. Due to the fact that the total average statistics of the CPI displays an increase, it is safe to incur that there will be a magnification of these indices in the 4th quarter of 2004, and the 1st quarter of the 2005 year. Reliance on the above table shows that the only areas that decreasing values occurred were in the divisions of Alcoholic Beverages and Tobacco, Clothing / Footwear, and Furnishings and Household Equipment. The definition of “unemployment” contains those persons actively seeking work, however have not been placed into a wage earning position. When examining the broader forms of indicators it is noticed that unemployment falls under two categories: leading and lagging indicators. To distinguish between the two indicators, take note that unemployment claims are leading and unemployment rates are lagging. Those persons who are not capable of acquiring a wage earning position, therefore choose to collect unemployment compensation, constitutes claims. However, persistent individuals who continuously search and hope to be stationed in the work field make up unemployment rates. A gathering of stockbrokers purchasing and selling bonds and stock is another aspect within the major indicators, these activities take place in the stock market. The Wall Street Journal states that “large-cap issues outperformed both mid-caps and s...