Economic Indicators

- Overview

Economic indicators are statistics (like GDP, unemployment, CPI) that gauge an economy's health, analyze past performance, and predict future trends, helping investors, businesses, and policymakers make informed decisions about markets, spending, and policy, with key producers including government bodies like the Bureau of Labor Statistics and private groups like the NBER. 

1. What they are:

• Data points reflecting economic activity (e.g., housing starts, retail sales, industrial production, inflation).
• Used to understand current economic conditions and anticipate future shifts, often categorised as leading, coincident, or lagging.

2. Why they matter:

• For investors: Help determine when to buy or sell assets and adjust portfolios.
• For businesses: Inform strategic decisions on investment, risk, and market trends.
• For governments: Guide monetary and fiscal policy.

3. Key examples:

• Gross Domestic Product (GDP): Total economic output.
• Unemployment Rate: Job market health.
• Consumer Price Index (CPI): Inflation measure.
• Housing Starts: Future construction activity.
• Retail Sales: Consumer spending strength.

4. Who produces them:

• Government Agencies: U.S. Bureau of Labor Statistics (BLS), U.S. Census Bureau, U.S. Bureau of Economic Analysis (BEA).
• Private Organizations: National Bureau of Economic Research (NBER) (dates business cycles).

Please refer to the following for more information:

• Wikipedia: Economic Indicator

- Phillips Curve

The Phillips curve shows the relationship between inflation and unemployment. In the short run, inflation and unemployment are inversely related; as one quantity increases, the other decreases. In the long run, there are no trade-offs. 

The Phillips curve links inflation to unemployment. The Phillips curve holds that unemployment and inflation are inversely related: as the level of unemployment falls, inflation increases. However, this relationship is not linear. Graphically, when unemployment is on the x-axis and inflation is on the y-axis, the short-run Phillips curve is L-shaped.

- Shrinkflation

In economics, shrinkflation, also known as grocery shrink ray, deflation, or shrinking packaging, is the process by which goods shrink in size or quantity, sometimes even reformulated or of lower quality, while prices remain the same or rise. The word is a portmanteau of the words deflation and inflation. Economist Pippa Malmgren was the first to use the term "shrinkflation" and its current meaning, although historian Brian Domitrovic had earlier used it The term used to refer to a situation where the economy is contracting while suffering from high inflation.  

Shrinkflation allows companies to improve operating margins and profitability by reducing costs while maintaining volumes, and is often used as an alternative to raising prices in line with inflation. Consumer protection groups have been critical of the practice