There is much debate as to what are micro-economic and macroeconomic indicators. Micro in this case refers to the smaller scale and so do the macro and micro economic indicators, which are both larger scales. For instance, a micro-economic indicator would be the gross domestic product, which is usually used by economists to determine the health of a country's economy. These are just two examples of micro-economic and macroeconomic indicators.
The concept is fairly simple, when considering these two kinds of numbers. The macro level consists of the overall state of the national economy, while the micro level consists of those individual events that affect the macro. For instance, one event may cause unemployment in one region and so cause a recession in another region, or the overall trend could be upward but the unemployment rate could be falling in one area and rising in another area. This all happens because of the different reactions of individuals and businesses on a micro level.
For macroeconomic purposes, the concept of micro and macro economic data is not as complicated. It is a matter of valuing the total economy at the local level, which would include the performance of the gross domestic product. The macro-economic indicators, which are more standard type economic data, compare overall performance at a national level. This includes any changes in gross domestic output, interest rates, inflation, employment rates, gross national debt, consumer spending, investment in infrastructure, government spending, and so on.
The term micro economic was first introduced in the late 1970s. At that time, it was originally called micro-economic variables and included many different items, which were then considered to be part of the macro-economic field. The thinking was that the entire macro picture should be examined at a micro-economic level as well. This has grown into the current practice of economists analyzing macro indicators at the national level as part of the macro-economic analysis.
One micro-economic indicator is the Purchasing Managers Index (PMI). The PMI reflects the buying decisions of manufacturers based on various factors. The most widely known of those factors are the overall earnings of the manufacturing firm. This can be used to measure the performance of a particular business cycle or economy. While this is the most commonly cited micro economic indicator, there are others that have been studied and developed over the years, which can be utilized by forecasters as a means of forecasting the future path of the economy.
Another of the micro economic indicators used is the inventory turnover rate, which measures the movement of products in a particular retail establishment. The general tendency is for products to move from the entry level to the checkout line quickly. The inventory turnover rate, which is updated monthly, can be used to get an idea of the direction of an economy. Changes in the inventory turnover rate can also provide information on the cost of goods sold by firms. This can be an indication of whether the prices of particular products are falling or rising. Other indicators of the economy include measures of consumer sentiment, readings on consumer spending power, and readings on market expectations.
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