How Are Economic Indicators Relevant to You? - dummies

How Are Economic Indicators Relevant to You?

By Michael Griffis

Part of Economic Indicators For Dummies Cheat Sheet

Economic indicators were first published for government leaders who needed a better understanding of the country’s current economic condition. Today, those indicators are useful across a wide variety of professions. Here’s how economic indicators can help you:

  • Investors: Use economic indicators to fine-tune your investment strategies, improve your buy/sell decisions, and match your asset allocation decisions to the economic cycle.

  • Business leaders: Make better staffing-level and hiring decisions, match inventories to the business cycle (businesses that are sensitive to the economic cycle need larger inventories during periods of economic growth than during recessions), improve business forecasts, and evaluate new business opportunities based on current economic conditions.

  • Purchasing managers: Improve raw-material price forecasts and adjust negotiating strategies to lock in longer-term pricing agreements during periods of economic slowdown when material prices tend to be lowest.

  • Policy analysts: Use these information-laden reports to guide your economically sensitive policy decisions.

  • Business students: Develop a thorough understanding of economic indicators to improve your general business knowledge and make you more valuable to future employers.