Index of Coincident Indicators

Index of Coincident Indicators is one of Economic Indicators. It comprises of many coincident economic indicators

An economic indicator is a statistical indicator by which the economic performance of present and predictions of the future performance can be analyzed. It is also used in the study of business cycles. So economic indicators are also referred as business indicator.

These indicators are produced in United States of America by The National Bureau of Economic Research (private), The Bureau of Labor Statistics, The United States Census Bureau and United States Bureau of Economic Analysis.

These business indicators can be classified into three groups according to their timing in relation to the business cycle.

They are:

Index of Coincident Economic Indicators

These indicators change at approximately the same time as the whole economy changes. Thus they provide information about the current state of the economy.

There are many coincident economic indicators. Some of them are Gross Domestic Product, Industrial Production, Personal Income and Retail Sales.

They may also be used to identify and study the dates of highs and lows in the business cycle, after they have occurred.

The components of Index of Coincident Economic Indicators are:

  1. Number of employees who are on non agricultural payrolls.
  2. Personal income excluding transfer payments.
  3. Industrial production.
  4. Manufacturing and trade sale.

On a state level, based on four variables, The Philadelphia Federal Reserve produces state level Index of Coincident Economic Indicators.

They are:

  1. Number of employees who are on non agricultural payrolls.
  2. Average number of working hours in manufacturing units.
  3. Unemployment rate.
  4. Wage and salary disbursements deflated by the consumer price index (U.S. city average).

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