Economic Indicators

Essay by KinghighUniversity, Bachelor's July 2005

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Economic Indicators

In this paper, Team B will define and discuss six economic indicators. The economic indicators chosen were: Housing Starts, Mortgage Rates, Retail Sales, Interest Rates, Personal Income and Foreign Exchange Rate. Analysts use these indicators and more to determine the state of the economy and where it has been and where it is headed. By forecasting certain trends, investors, the government and the banking industry will take this statistical data and adjust their decisions accordingly.

Housing Starts

A housing start is defined as "The commencement of construction of a new housing unit. For multiple dwelling structures, each unit is counted as a start when excavation of the building site begins. For public housing, the awarding of the contract is counted as the start" (, 2005).

Bloomberg currently stated that housing starts in the U.S. have done much better recently. They have gone up 0.2 percent in May.

This is the quickest it has gone up in three months. It seems that mortgage rates are low and there is better job growth. The two of those combined have powered construction.

In May there were groundbreakings for 2.009 million for new housing units. In April there were 2.005 million groundbreakings. A survey of economists only called for 2.05 million in May. The home building industry's expectations are "that this will be the best year for homebuilding since 1978 and the best ever for home sale" (Schlisserman, 2005).

Single-family home starts increased 4.7 percent in May to a 1.704 million-unit pace. However "starts of townhouses, apartments and other multifamily dwellings fell 19.3 percent to a 305,000 annual rate" (Schlisserman, 2005).

Mortgage Rates

A mortgage rate is defined as "the rate of interest paid on the mortgage loan. Expressed as a percentage" (, 2005). Mortgage rates are relatively low at...