Economic Indicators: Variables of Change

Economic Indicators: Variables of Change

This essay will show the brief history and status on six economic indicators that have been chosen to be represented. The project will be augmented with a PowerPoint presentation illustrating graphical statistics reflecting the current trends and give the audience an idea of what is going on in each indicator. Important to note is that our country has a system upon which the economy operates that encompasses many different variables that are not all necessarily well-known. These variables dictate how the economy will run. These economical dynamics can include the inflation rate, the status of unemployment, among other things that will be illustrated in this paper. The following economic indicators will be addressed in this project:

1. Housing Starts

2. Personal Income

3. Federal Reserve

4. Real GDP

5. Unemployment Rate

6. Inflation Rate / CPI

Housing Starts

In a nutshell, housing starts are the number of residential building construction projects started during a specific period, usually within a given month. This factor is a key economic indicator that provides a timely measurement of construction activity and a natural forecast of future activity.

The Bureau of Census reports on both starts and permits approximately the 16th of each month. Economists can predict the general state of the economy by monitoring this report. During periods following a drop in mortgage rates, there tend to be more permits issued and housing starts (McGraw-Hill, 2000).

The National Association of Home Builders reports that builder confidence has plunged even lower than it was in the first six months of 2007. The reason for this lower confidence is attributed to rising interest rates, the surplus of unsold homes, and problems in the subprime mortgage market. Housing starts have averaged 1.47 million on an annualized basis. The Commerce Department reports that starts continued