ECONOMIC INDICATORS
Core Economic Indicators Defined
Unemployment Rate
The unemployment rate is the percentage of the labor force that
is unemployed (actively looking for work). It is a key indicator
of the performance of the economy, generally lagging economic
activity. It is tracked monthly for the nation, state and counties
of the Seven Rivers Region.
Total Employment
Total number of persons of 16 years and over in the civilian non-institutional
population who are employed, this is probably the most important
and consistent indicator of the current economic situation. It
is tracked monthly for the nation, state, and the counties of
the Seven Rivers Region.
Gross Domestic Product
The GDP is the total market value of all goods and services produced
within a country during a given period of time, usually one year.
This is the government’s official measure of how much output
our economy produces. It is tracked quarterly for the nation.
U.S. Leading Index
The purpose of the leading indexes is to predict changes in the
coincident indexes, which reflect the present state of the economy.
The U.S. Leading Index is a composite index of ten economic indicators
compiled by The Conference Board, which are designed to signal
the direction of the economy in a timely and consistent manner.
WI Composite Index Leading Indicators
Leading indicators tell about economic activities that change
pace before shifts of the economy as a whole. The composite index
combines several leading indicators into a single number. The
index number combines the values of five series, making it a more
reliable indicator than a single indicator.
Consumer Price Index
The Consumer Price Index (CPI) is an index that measures changes
in the price of a basket of typical consumer goods. The changes
in the index reflect price changes; hence monthly changes in the
CPI represent the rate of inflation. The CPI is a widely used
indicator of inflation (or deflation) and indicates the changing
purchasing power of money in the U.S.
Consumer Sentiment Index
The University of Michigan’s Survey of Consumers asks questions
of the public concerning their current financial position and
their prospects for the future. The index can be helpful in predicting
sudden shifts in consumption patterns. This information is tracked
at the national level. A similar index for the Seven Rivers Region
was built using an instrument similar to that of the Survey of
Consumers.
Seven Rivers Regional Consumer Sentiment Index
Using a survey instrument similar to that used in the University
of Michigan’s Survey of Consumers, an index is compiled
for the Seven Rivers Region. It is produced by the College of
Business Administration students at the University of Wisconsin
– La Crosse.
Real Weekly Earnings
Remuneration (pay, wages) of a worker or group of workers for
services performed weekly, real weekly earnings indicate the rate
of real wage gains for workers, and therefore their buying power.
30 Year Fixed Rate Mortgages
Reported by Federal Home Loan Mortgage Corporation (Freddie Mac),
the 30-year fixed rate mortgage is the most common way to finance
the purchase of a home. A fixed rate mortgage carries an interest
rate that will be set at or before the time of the loan, and remain
constant for the length of the mortgage. If you have a 30-year
mortgage, the rate you pay will be fixed for all 30 years. At
the end of the 30th year the loan is fully paid off.
Federal Funds Rate
The interest rate that banks charge each other when loaning bank
reserves through the federal funds market is a key interest rate
in the economy because it helps to determine banks’ minimum
cost of getting funds. If the federal funds rate is higher, then
banks are likely to raise the interest rates they charge, like
the prime rate, home mortgage rate, or the rate on car loans.
It is also the current target interest rate for the Federal Reserve’s
monetary policy.
Cost of Living
The amount of income or money needed to acquire a given quantity
of goods and services or to achieve a given living standard. The
cost of living is typically indicated by a price index such as
the Consumer Price Index (CPI). The CPI, for example, measures
the changing cost of a specific market basket of goods. An increase
in the CPI indicates that the cost of this market basket has increased,
and presumably so, too, has the cost of living. This information
is tracked for the La Crosse MSA, using Bestplaces.net.
Housing Permits
A measure of the number of residential units on which construction
is begun each month is tracked because an increase in building
permits usually occurs a few months after a reduction in mortgage
rates. It represents a large portion of the volatile investment
component of GDP. It indicates expectations for the future, since
new home construction is a large expenditure. This is currently
tracked at both the national level and the local La Crosse MSA.
Per Capita Income
The level of average income during a period of time is obtained
by dividing the total income of workers by the total population.
The resulting figure is referred to as per capita income. This
is a measure of the standard of living and is reported annually
for the nation, state, and individual counties with a 2 year lag.
Median Family Income
Another indicator is the level of income at the middle
of an array wherein economic units, e.g. families, are arranged
from increasing order according to the size of their income. This
is another measure of the standard of living and is reported annually
for the nation, state, and individual counties with a 2 year lag.
