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Economic Condition

In: Business and Management

Submitted By Hellquist
Words 3156
Pages 13
Question 1
There are many different ways to measure the performance of the economy. Economic indicators are the tools we use to measure this performance or forecast future performance. Some indicators are broader than others, some focus on specific industries. It is important to look at variety factors to assess the overall health of the economy. I have analyzed ten different factors in order to as gauge the current state of the United States economy.
The consumer price index measures the average change in the prices paid by urban consumers for all goods and services purchased for consumption by urban households. The CPI lets us compare what a certain group of goods and services cost the average consumer this month compared to last month or any other past month. It reports price changes in over 200 categories, weighted by their importance, arranged into eight major groups. The CPI also includes several everyday fees such as vehicle registration, utilities, and sales taxes. This provides us with a real outlook on how inflation is affecting the majority of consumer’s cost of living, by looking at how the prices of their most used items are increasing. We can use these monthly snapshots observe long-term inflation trends. Financial markets are very sensitive to unexpected changes in this index, as they indicate the consumer’s ability to spend.
Moody’s will refer to core CPI frequently, core CPI refers to the consumer price index less food and energy. The core CPI gives a look at the less-volatile aspects of the index so that we can have steadier readings of all goods and services without the two most sporadic contributors. The CPI is currently the highest it has ever been at around 233. You can see from the chart that it has been steadily increasing over time. The CPI was up only 0.1% in August, a much smaller increase than analysts predicted; a 0.3% drop in energy

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