Important Lagging Indicators
Consumer Price Index (CPI). The CPI is a monthly report released by the Bureau of Labor and Statistics. It measures changes in the price of a “basket of goods” that a typical consumer might purchase, including food and energy products. The CPI is considered the best measure of inflation. The release of the CPI has a large effect on both the equity and debt markets, because it gives a strong indication of whether the Federal Reserve will alter interest rates.
Other lagging indicators:
- • Business spending
- • Unemployment report
- • Prime rate charged by banks
- • Bank loans outstanding
- • Employment Cost Index (ECI)—monthly changes in employee wages and benefits
The exam may ask a question such as, “Which of the following is the best sign that the economy is eit