13.5.08

Trendspotting the Economy

It is now perfectly clear, that the global economy is in a down spin. Financial pundits claim however, that during fortune reversals, an opportunity is always to be found. And so therefore, it pays to have a good sense of the world's and each country's economic strengths and weaknesses. To be informed is to be prepared.

Trends usually use indicators. Indicators that are commonly found and reported over the old and the new media.

Take note of:

1. Housing Trends - consumer attitudes, interest rates
2. Sales of Department Stores - seasonal or geographic points to other indicators
3. Retail Sales - Monthly, Bi-annual and Annual
4. New Car Sales - consumer buying trends
5. Index of leading economic indicators (engines of economic growth)
6. Gross Domestic Product (GDP) - total value of goods sold (countrywide, worldwide, region wide) When GDP declines in two succeeding quarters, a recession is indicated.
7. Consumer Price Index (CPI) also known as cost of living index which measures price changes of goods and services and includes, housing, food, transportation, clothing, medical care and electricity.
8. Capacity Utilization - that which measures the activity of manufacturers and the percentage rate at which these factories are operating. 85% rate and above is good. A downturn means unemployment is high.
9. Unemployment Rate - indicates the overall economic status of a country
10. Federal or Central Bank rates - interest rates banks charge each other for overnight borrowing.
11. Bank Prime Rates - interest rates banks charge their most credit worthy clients.