Economic data or indicators provide measurements for evaluating the health of the economy. They also give us a fair view of the current business cycles, Investment and consumption patterns.
Economic Indicators are broadly categorized as Leading Indicators & Lagging Indicators.
Leading Indicators : These Indicators indicate a change even before the economy factors the adjustments. They are based on current data & are forward looking , discount the current values according to future expectations. Stock Markets are the perfect example of a Leading Indicator.
Lagging Indicators : These Indicators reflect the economy’s historical performance and confirm the trends with a time lag. They provide us a confirmation of where we are and where we have been. Unemployment data is a lagging indicator. The unemployment rate may show increase even if the economy is recovering. Historically data suggests the Markets turn much before the Unemployment rate peaks.
Today we are going to discuss two important manufacturing data points