Working with Economic Indicators

Chapter 9

Indicators of Fiscal and Monetary Policy

Government officials and economists who guide macroeconomic policy monitor the same economic indicators as executives and managers in the private and nonprofit sectors. To understand the significance of any economic indicator report, one should not only assess what the reported indicator values say about the state and direction of the economy, but also gauge how those in charge of macroeconomic policy might respond. For example, a report that indicates an unexpected jump in the unemployment rate may lead the Federal Reserve to take action to lower interest rates.

There are two major types of macroeconomic policy: fiscal policy and monetary policy. Changes in these policies may be triggered ...