As mentioned earlier, macroeconomics looks at the overall economy, and that view is incomplete without a set of economic indicators. Here are some of the most monitored indicators.
(Economic Indicators) Gross Domestic Product (GDP)
Gross domestic product (GDP) represents the total value of all finished goods and services produced by an economy within a year.
The gross domestic product of the United States reached $29.37 trillion in the third quarter of 2024.
Unemployment (Economic Indicators)
In the U.S., the Bureau of Labor Statistics (BLS) publishes a monthly unemployment report. This report details how many people are working, the average hours they work, and the average earnings. This information helps calculate the unemployment rate.
The report estimates the number of people working for pay during a specific period. More importantly, it tracks this number over time to see if unemployment is rising.
The U.S. unemployment rate at the end of 2024 was 4.1%.
Inflation (or Deflation)
Inflation in consumer prices is monitored to identify potential problems in the economy. If inflation is growing faster than income, the economy may face issues. Inflation can also decrease, which is known as deflation, though this is less common.
BLS publishes a key inflation measure called the Consumer Price Index. This index tracks the costs of goods and services each month. It breaks down spending into important categories, such as food, energy, and rent costs. These numbers determine the rate of inflation.
In December 2024, the Consumer Price Index increased by 2.9% compared to the previous 12 months.
U.S. Bureau of Labor Statistics. “Consumer Price Index: 2024 in review.”
Balance of Trade
An economy’s balance of trade compares the money spent on imports to the money earned from exports. It is primarily measured by recording all products that pass through a country’s customs office.
A nation has a positive balance of trade when it exports more than it imports. It has a negative balance when it buys more than it sells.
Neither situation is inherently good or bad. A country may experience a negative balance because foreign businesses are investing heavily in its future. In contrast, a country with a positive balance may have protectionist policies that could be detrimental over time.