Understanding economic indicators is crucial for making informed investment decisions. These indicators provide insights into the health of the economy and can


Economic Indicators Every Investor Should Know | FMP


blog post cover photo

Image credit: Alexander Grey

Understanding economic indicators is crucial for making informed investment decisions. These indicators provide insights into the health of the economy and can guide your investment strategy.

What are Economic Indicators?

Economic indicators are statistical metrics used to assess the overall health of the economy. They can influence market trends and investor behavior.

Key Economic Indicators to Watch

1. Gross Domestic Product (GDP)

GDP measures the total value of goods and services produced in a country. A growing GDP indicates a healthy economy, while a declining GDP can signal economic trouble.

  • Why It Matters: Indicates economic growth and potential investment opportunities.
  • How to Use It: Monitor GDP trends to gauge overall economic health and make strategic investment decisions.

2. Unemployment Rate

The unemployment rate measures the percentage of the labor force that is unemployed but actively seeking work. High unemployment can indicate economic distress, while low unemployment suggests economic stability.

  • Why It Matters: Reflects economic stability and consumer spending power.
  • How to Use It: Use unemployment trends to assess economic conditions and adjust your portfolio accordingly.

3. Inflation Rate

The inflation rate measures the rate at which the general level of prices for goods and services is rising. Moderate inflation indicates a growing economy, while high inflation can erode purchasing power.

  • Why It Matters: Affects purchasing power and investment returns.
  • How to Use It: Monitor inflation to protect your investments from eroding returns and consider inflation-protected assets.

4. Interest Rates

Interest rates, set by central banks, influence borrowing costs and economic activity. Low rates encourage borrowing and investment, while high rates can slow economic growth.

  • Why It Matters: Impacts borrowing costs and economic growth.
  • How to Use It: Track interest rate trends to make decisions on fixed-income investments and borrowing strategies.

5. Consumer Confidence Index (CCI)

The CCI measures consumer sentiment regarding the economy. High consumer confidence indicates optimistic spending behavior, while low confidence suggests caution.

  • Why It Matters: Predicts consumer spending trends and economic activity.
  • How to Use It: Use CCI trends to anticipate market movements and adjust your investment strategy.

6. Housing Starts

Housing starts refer to the number of new residential construction projects. This indicator reflects the health of the housing market and overall economic activity.

  • Why It Matters: Indicates economic health and consumer confidence.
  • How to Use It: Monitor housing starts to gauge economic growth and investment opportunities in real estate.


Keeping an eye on these key economic indicators can help you make more informed investment decisions. By understanding the trends and implications of these metrics, you can better navigate the complexities of the market.

Stay informed about economic trends and their impact on your investments. Visit for tools and resources to help you make data-driven investment decisions.

Other Blogs

Nov 25, 2023 6:39 AM - Parth Sanghvi

DCF Valuation vs. Comparable Companies Analysis: Choosing the Right Valuation Method

Choosing the Right Valuation Method: DCF vs. Comparable Companies Analysis Introduction: Valuation methods play a pivotal role in determining the fair value of a company, aiding investors in making informed investment decisions. Two commonly used methods, DCF Valuation and Comparable Companies A...

blog post title

Dec 23, 2023 2:19 AM - Parth Sanghvi

Understanding the Limitations of DCF Analysis: A Guide to Overcoming Challenges

Introduction: Discounted Cash Flow (DCF) analysis stands as a cornerstone in valuing investments, yet its efficacy is contingent upon various assumptions and methodologies. While a powerful tool, DCF analysis comes with inherent limitations and challenges that investors must acknowledge to make i...

blog post title

Dec 25, 2023 2:28 AM - Parth Sanghvi

Integrating Sustainability into Valuations: Navigating ESG Factors within the Discounted Cash Flow (DCF) Model

Introduction: The investment landscape is undergoing a profound shift with a heightened emphasis on sustainability and responsible investing. In this blog post, we explore the intersection of Environmental, Social, and Governance (ESG) considerations within the Discounted Cash Flow (DCF) model, h...

blog post title


Financial Modeling Prep API provides real time stock price, company financial statements, major index prices, stock historical data, forex real time rate and cryptocurrencies. Financial Modeling Prep stock price API is in real time, the company reports can be found in quarter or annual format, and goes back 30 years in history.
2017-2024 © Financial Modeling Prep