manufacturing When workers get less overtime, output may be declining. 2. Average initial weekly claims for state unemployment insurance When first-time claims for unemployment insurance benefits rise, employment may be falling. 3. New orders for consumer goods and materials When manufacturers receive smaller orders, they may cut back on output. 4. Vendor performance (companies receiving slower deliveries from suppliers) Better on-time delivery by suppliers means they have a smaller backlog of orders. 5. New orders for capital goods If these orders drop, then businesses are planning less output. 6. New building permits issued This provides a good indication of how much construction activity there will be three or four months from now. 7. Index of stock prices Declining stock prices may reflect declining prospects for corporate sales and profits. 8. Money supply If the Federal Reserve slows the growth of the money supply, interest rates will rise, and it will be harder for businesses and individuals to borrow money. 9. Spread between rates on 10-year Treasury bonds and Federal funds Long-term interest rates are usually much higher than short-term interest rates. Federal reserve policies designed to slow the economy raise short-term interest rates with little effect on long-term rates. So a smaller spread between short-term and long-term interest rates implies a restrictive monetary policy and a decline in output. 10. Index of consumer expectations As consumers grow less confident about the future, they plan to make fewer major purchases.
Unemployment rate= Number of unemployed/Labor force Types of Unemployement frictionally unemployed are people who are between jobs or just entering or reentering the labor market. Because our system of fi lling jobsnewspaper classified ads, employment agencies, corporate recruiters, executive headhunters, help-wanted signs, Internet postings, and word of mouthis imperfect, usually weeks or months pass before positions are filled. structurally unemployed.A person who is out of work for a relatively long period of time, say, a couple of years Cyclical =If we allow for a certain amount of frictional and structural unemployment, anything above the sum of these two would be cyclical unemployment Seasonal Unemployment
Inflation - Demand-Pull Inflation When there is excessive demand for goods and services, we have demand-pull infl ation. What is excessive? When people are willing and able to buy more output than our economy can produce. Somethings gotta give. And what gives are prices. Excessive demand causes demand-pull inflation. Demand-pull inflation is often summed up as too many dollars chasing too few goods.. This usually happens during wars. The government spends a lot of money on uniforms, tanks, planes, rifl es, bullets, bombs, and missile systems. Private citizens want more consumer goods and services. Cost-Push Inflation There are three variants of cost-push infl ation. wage-price spiral. Because wages constitute nearly two-thirds of the cost of doing business, whenever workers receive a signifi cant wage increase, this increase is passed along to consumers in the form of higher prices. Higher prices raise everyones cost of living, engendering further wage increases. second is profit-push infl ation. Because just a handful of huge fi rms dominate many industries the power to administer prices in those industries rather than accept the dictates of the market forces of supply and demand. Finally supply-side cost shocks, most prominently the oil price shocks
GDP gap The amount of production by which potential GDP exceeds actual GDP.