Economic Indicators Glossary

Economic news is full of jargon. This glossary explains the terms used across econHQ in plain English, with a link to the page where you can see the latest data for each.

A B C D F G H I J L M N P Q R S T U V Y

Annualized rate: A growth rate scaled up to show what would happen over a full year if the current pace continued. U.S. quarterly GDP growth is reported this way: a 0.5% quarterly gain is roughly 2% annualized. See the data →
Basis point: One hundredth of a percentage point (0.01%). A rate move from 4.25% to 4.50% is a 25-basis-point increase. See the data →
Building permits: Authorizations issued by local governments to build new housing units. Because they come before construction begins, permits are a leading indicator of homebuilding. See the data →
Capacity utilization: The share of the nation’s industrial capacity — factories, mines and utilities — that is actually in use. High readings suggest little slack and potential price pressure. See the data →
Case-Shiller index: A home price index that tracks repeat sales of the same houses over time, so it measures price changes rather than shifts in the mix of homes sold. See the data →
Consumer Price Index (CPI): The Bureau of Labor Statistics’ measure of the average change in prices paid by urban consumers for a basket of goods and services. Its year-over-year change is the most commonly quoted inflation rate. See the data →
Consumer sentiment: A survey-based index of how households feel about their finances and the economy, most commonly the University of Michigan index. See the data →
Core inflation: Inflation excluding food and energy prices, which are volatile. Core measures give a clearer picture of the underlying trend. See the data →
Credit spread: The extra yield investors demand to hold a riskier bond instead of a Treasury of similar maturity. Widening spreads signal rising concern about defaults. See the data →
Disinflation vs. deflation: Disinflation is a slowdown in the rate of price increases (inflation falling from 5% to 3%). Deflation is an outright fall in the price level (inflation below zero). See the data →
Durable goods: Manufactured products meant to last three years or more, such as cars, appliances, machinery and aircraft. New orders for durable goods signal future factory activity. See the data →
Federal funds rate: The interest rate banks charge each other for overnight loans of reserves. The Federal Reserve sets a target range for it, making it the main lever of U.S. monetary policy. See the data →
FOMC: The Federal Open Market Committee, the Federal Reserve body that sets the federal funds rate target. It holds eight scheduled meetings a year. See the data →
Gross domestic product (GDP): The total market value of all final goods and services produced in a country in a given period. The broadest measure of economic output. See the data →
Housing starts: The number of new residential construction projects begun in a month, reported at a seasonally adjusted annual rate. See the data →
Industrial production: An index of the real output of U.S. factories, mines and utilities, published monthly by the Federal Reserve. See the data →
Initial jobless claims: Weekly count of new applications for unemployment insurance. Because it is published weekly with little delay, it is one of the timeliest signals of layoffs. See the data →
Inverted yield curve: A situation where short-term Treasury yields are higher than long-term yields. It has historically preceded U.S. recessions. See the data →
JOLTS: The Job Openings and Labor Turnover Survey from BLS, which measures job openings, hires, quits and layoffs. See the data →
Labor force: Everyone age 16 and over who is either working or actively looking for work. People not looking for work are outside the labor force. See the data →
Labor force participation rate: The labor force as a share of the civilian population age 16 and over. See the data →
Leading indicator: A data series that tends to change direction before the overall economy does, such as building permits, the yield curve or jobless claims. See the data →
M2 money supply: A broad measure of money including currency, checking and savings deposits, small time deposits and retail money-market funds. See the data →
Metropolitan statistical area (MSA): A federally defined region made up of a core urban area of at least 50,000 people and surrounding counties tied to it by commuting. See the data →
Nominal vs. real: Nominal figures are in current dollars; real figures are adjusted for inflation. Real GDP growth shows whether output, not just prices, increased. See the data →
Nonfarm payrolls: The number of paid jobs in the U.S. outside of farming, private households and a few other categories, from the BLS establishment survey. The headline “jobs added” number in the monthly jobs report. See the data →
PCE price index: The Bureau of Economic Analysis’s measure of prices for personal consumption expenditures. The Federal Reserve’s 2% inflation target is defined using it. See the data →
Percentage point vs. percent: A percentage point is the simple difference between two percentages (4% to 5% is a 1-point rise). A percent change is relative (4% to 5% is a 25% increase). See the data →
Personal saving rate: Personal saving as a share of disposable (after-tax) personal income. See the data →
Producer Price Index (PPI): A family of BLS indexes measuring the prices domestic producers receive for their output. Often an early signal of consumer inflation. See the data →
Quantitative easing / tightening: Large-scale purchases (easing) or run-off (tightening) of bonds by a central bank, used to influence long-term interest rates beyond the policy rate. See the data →
Recession: A significant, widespread and lasting decline in economic activity. U.S. recession dates are determined by the National Bureau of Economic Research, not by a simple two-quarter GDP rule. See the data →
Seasonally adjusted annual rate (SAAR): A monthly or quarterly figure adjusted for normal seasonal patterns and scaled to a yearly pace, used for housing starts, home sales and GDP. See the data →
Seasonal adjustment: A statistical technique that removes predictable calendar patterns — holiday hiring, summer construction — so underlying trends are easier to see. See the data →
Treasury yield: The annual return an investor earns by holding a U.S. government bond to maturity. The 10-year yield is a benchmark for mortgage and corporate borrowing rates. See the data →
Unemployment rate: The number of unemployed people — without a job, available and actively looking — as a share of the labor force. See the data →
VIX: The Cboe Volatility Index, which measures the stock market’s expected volatility over the next 30 days based on S&P 500 option prices. Often called the “fear gauge.” See the data →
Year-over-year (YoY): The change from the same period one year earlier. Commonly used for inflation and other data because it removes seasonal effects. See the data →