Economic Data Interpretation Series LeadingIndicators

{}Posted in2023/2/24 18:50:16 | 4Browse

Def forexrebatesition: LeadingIndicators ForexrebateforExness composed of a series of 10 related economic indicators, the main feature is to reflect the overall cashback forex when the turnaround, Forex rebate for Exness predict the future economic direction may be published time: most in the last working day of each month Data interpretation and impact: Generally speaking, if the leading indicators fall for three consecutive months, the economy will enter a cashbackforexexness; if they rise for three consecutive months, the economy will prosper or continue to prosper. EconomicBulletinBoard pointed out that the indicator can be 11 months before the recession to predict the economy will go downhill, and in the economic expansion three months before the recovery of the economy can be predicted Economic leading indicators of the following 10 components (the weight is changing, but the magnitude is not large): 1. average weekly working hours in manufacturing 19.65%2.Average weekly jobless claims 2.52%3.Manufacturing new orders (consumer goods and materials) 5.88%4.Vendor performance 2.92%5.Manufacturing new orders (non-defense capital goods) 1.46%6.Number of building permits (new private housing) 2.02%7.Standard & Poors 500 Index & nbsp;2.91%8.M2 money supply27.74%9.Interest rate differential between the 10-year Treasury bond and the federal rate33.03%10.Consumer expectations forexcashrebate 1.88%Historical review: nbsp; Performance in recent years before the recession: 73.11-75.3 recession, the index for eight consecutive times until 75.1 stop; 80.1-80.7 recession, the index from 79.10 has been slipping to December (3 times); 81.7 -82.11 recession, the index from 81.5 until July (3 times); 90.7-91.3 recession, the index from 90.4 decline, followed by four consecutive months flat to July, and four consecutive declines to November; 2001 recession, the index from May 2000 down 11 times to March 2001 to stop Analysis of the leading index to do found that since 1971, the largest decline in the leading index is March 1980, down 2.7%, because of soaring oil prices, the Iranian coup, the new government refused to export oil to the United States, the world food shortage, these led to serious inflation, the economy is in danger of recession, by the calculation of the index, it is not difficult to know why there is The largest drop in history In the face of the danger of a prolonged recession, the government used a tight monetary and financial policy to combat inflation, finally causing the economy to begin to rebound in 1980, the leading index rose continuously from May 1980 and reached an all-time high of 1.7% growth in June 1980, and also foreshadowed the July 1980- The economic expansion in July 1981 A study of the relationship between the leading index and the economic growth rate found that in the relationship between the leading index and the growth rate lagged and ahead of the data, respectively, it can be seen that the correlation coefficients between the leading index and the growth rate ahead of the data for the months of 0, January, February, March, April, May, and June are 0.938, 0.945 The correlation coefficients of 0.950, 0.952, 0.951, 0.950 and 0.948 show that the leading index is indeed a leading predictor of the growth rate and is the best predictor of the growth rate in the coming March. 0.879 (1 indicates full confidence) By looking at the relationship between the index and the economic cycle, it was found that the index underperformed in the 1980-1981 and 1990-1991 recessions in the 1980-1981 recession before the index also rose 2 times in the 1990-1991 recession, although this time it is generally believed to be due to the sudden In 1984 and 1987, the index gave the wrong signal of recession, in these 2 years, the index fell for 3 months, but the recession did not appear in 1984, the first index warning, but the economy did not recession, which can be considered a very good example of the Feds success in regulating the economy: the economy recovered from the 1981-1982 recession and recovered strongly When the Fed began to implement austerity policy, the economy entered a brief downturn and all 10 leading components began to decline. Considering that there was a certain degree of inflation, the Fed did not immediately relax its policy, and when inflation came down, they immediately eased monetary policy and the economy began to move forward and the recession did not come. Political events occurred but investment, consumer confidence and expectations were hit, the total index fell, but then people realized that the stock market crash and the U.S. economic base did not have much connection, confidence rose rapidly, recession did not come 1995 index fell three times in a row to send the message of recession, the main reason is that in 95 years the dollar depreciated significantly, thus forcing the FED to raise interest rates, resulting in a decline in the economic boom, then The dollar stabilized, interest rates gradually fell, the economy did not recession and in January 2000, in fact, the index began to fall, only to May continued to fall, if sensitive to the data, should be able to see the subsequent recession in 2001 Why use the leading index to predict the economic growth rate is not completely correct? The main reason is that, on the one hand, in the calculation of some components, the use of the sampling method, and this method can not avoid errors, on the other hand, sometimes some components of the data can not be obtained, only to correct the calculation method, and this will also appear errors at the same time, the government and the Federal Reserve quickly and wisely regulate is also an important reason to avoid recession expectations become reality although the leading index can not be 100% predict the future Although the Leading Index cannot predict the economy 100%, its usefulness and high credibility still attract the attention of countries, and so far it is still one of the main indicators for econometricians to predict the prospects of economic development. The current index has risen four times in a row and then fallen once (until February 06), as shown by the above weights, indicating that the manufacturing sector is still performing well and the overall economy is strong, and the level of interest rates will still be adjusted upwards

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