Economic Indicators

What this video covers

• Whether a given statistic is a leading, coincident, or lagging indicator, with special attention to the initial unemployment claims vs. unemployment rate trap
• The GDP formula: consumer spending plus business investment plus government spending plus net exports, and why real GDP adjusts for inflation while nominal GDP does not
• The textbook recession definition: two consecutive quarters of declining gross domestic product (GDP)
• The four types of unemployment (frictional, structural, cyclical, seasonal), which one spikes in a recession, and why the natural rate of unemployment excludes cyclical unemployment entirely
• The difference between a trade deficit (imports exceeding exports) and the broader balance of payments, and why the balance of payments must always balance across current, capital, and financial accounts
• Why the Consumer Price Index (CPI) is a lagging indicator and how the Federal Reserve uses this inflation data to guide monetary policy