Finance

Economic indicators are points of interest for financial analyst's point that can help companies define and project past and future economic trends, aid, and making sound business decisions, and forecasting growth expectations. This paper will elaborate on the gross domestic product (GDP), inflation rate, as well as the unemployment rate.

The economist are expecting unemployment to remain steady over the last six months with November 02 being at 6.21%, December 02 at 6.20%, March at 6.21%, and April 03 at 6.16% (Financial Forecast, 2002). At the end of the business day, 11/14/02, the unemployment rate is at 5.70%, which is up by 1/10th from the previous month. Economists are expecting layoffs to stabilize, however not expecting companies to go on a hiring spree. Rather than hiring additional help, business will work existing employees longer hours (Aursa, 2002).

The Bureau of Economic Analysis calculated the Gross Domestic Product (GDP) at 3.10% at the close of the business day on November 14,2002 (Financial Forecasts, 2002). The economist analysis's predict for the remaining time in the fourth quarter that the GDP will drop between 1 and 2 percent (Reuters, 2002). "There were some signs in the third quarter GDP report that suggested business might be starting to modestly raise investment spending, something that economists say is vital to keep some economic momentum going (Routers, 2002)." Economists at the Department of Commerce will fluctuate between November 2002 to April 2003 and with a slight increase between 3.1% and 3.2%.

Inflation represents an increase of prices of goods and services that are purchased by consumers. "Inflation does, however, redistribute income from people who cannot or do not raise their prices to people who can and do raise their prices "(Colander. 2001). At the close of the business day of November 14,2002, economists calculated the inflation rate is at 1.45%. (Financial Forecasts, 2002). Economists are predicting inflation to raise 1.6% through the fourth quarter (BMI Global, 2002). "Inflation prevents governments from expanding the economy and reducing unemployment"(Colander.2001). At year-end of 2003, inflation is expected to rise to 2.4%.

The economic indicators predict our federal government and local industries. Economic indicators are vital tools in predicting future economic activity and growth. Indicators can create shifts in economy by