Saturday, May 26, 2012
Bizarre Economic Indicators
outstanding list of weird indicators that economists can use to determine which part of the business cycle the economy is in or will be in. For example, an increase in prostitution, underwear sales, drinking at home, composition of the waitress industry and more signal the economy's movement from good times to bad. The Motley Fool has four key indicators here. The Durable Goods Orders, is a key indicator of manufacturing activity in the upcoming months. If durable goods orders increases, it's a sign that production will increase so employees will retain their employment. Durable goods last three or more years. For companies like HNI, durable goods such as fireplaces are tied to other durable goods, so an increase in durable goods orders is a sign that there will be employment and productivity growth. For equity investors, this might trigger buying. Bond investors might take the increased activity as a sign of future inflation and pummel the market raising yields. If the economy is indeed strengthening, the USD could appreciate. Predicting the future is impossible, but there are some clues. Aside from durable goods, it could be that there is an increase in the number of good-looking waitresses.