Business indicators presentation team 1 michele^j misty^j lofton and liana

Prepared by:
Team 1
Michele, Lofton , Misty,
and Liana

The current condition of the
economy, in our Option:
 Possibly critical. Huge deficit. None-the-less. Our team
believes the economy is coming back slowly.
 HEADLINES:
 Consumer confidence Climbing. Growth up. Expansion
up. No inflation pressures in the Feds eyes.
 Comments: Prove / disprove ; (?)/ disaster better economy.
 Dad is in real-estate more work
 Mine leaving to morocco for contracts
 Jan., April, July.

WHAT THE ECONOMY IS DOING
TODAY
 The Economy they say is turning around slowly.
 Trying to recover, slowly recovering?

What is an economic indicator:
"Business Indicators“
 Cover selected quarterly data and offers a
statistic about the economy.
 One application of economic indicators is the study of
business cycles.

Why are Economic Indicators
Important?
 http://zfacts.com/p/461.html National Debt Clock Here
 Look for major shift and trends, understanding the outcomes of problematic events, see the
unknown. Put numerical meaningful values on things we admit we do not know. What is going on,
what is gong tot happen, show our expectations, make order out of chaos, know exactly how
many, the probability of an event. To try to describe the operations in the role of the aggregate,
weather to bet on this or that outcome, Measure frequency, challenge our intuitions, View info
historically, to put into context and subtext, see www.pedictwise.com
 Speculate, more accurate that the polls or the news. www.makingsence.com Paul Solomon.
 Every week there are dozens of economic surveys and indicators released. In the past, only
professionals and economists had the advantage in receiving this type of data in a timely fashion.
Fortunately, the internet has changed this giving everyone access. Economic indicators can have a
huge impact on the market; therefore, knowing how to interpret and analyze them is important
for all investors.
 Markets use information to set prices. Investors use all the information at their disposal to
make decisions. If a set of economic indicators suggest that the economy is going to do
better or worse in the future than they had previously expected, they may decide to change
their investing strategy.
 Read more: http://www.investopedia.com/university/releases/#ixzz29Eq9FEtl

How do indicators help policy
makers make decisions?
 Certainly, the decision of the voter will not be taken on the basis of indicators alone. Many other factors play a role,
What makes indicators unique as determinants of business. They reveal the success or failure of decisions. There is
no causal link between policy decisions a company will take. Indicators instead punish bad decisions, and reward
good ones . Decisions come along with the indicator If the media misuse GDP as a measure of success, then any
decision that increases GDP is “good”, even if it decreases real welfare...
 We will examine in more detail how indicators, through their influence on the decisions, make pressure on the
decision-making process of governments and parties.
 We will look at four indicators and compare there similarity and differences.
 All four indices are aggregated to a “Policy Performance Index”, PPI, and presented as a line chart organized in
concentric graphs. • the size of each segment of the graphs reflect the importance (the “weight”) of the issues for
politics or business; each segment reflects the judgment of current policy performance on a scale, to see the good
and the bad. The aggregated valuations of the underlying segments shows the average of the underlying
valuations.
 Read more: http://esl.jrc.it/envind/idm/idm_e_09.htm

How do they work with the Circular
Flow Model?
 A visual model of the economy that illustrates how households and
businesses interact through markets for products and markets for
resources. The top half, represents product markets: Households interact
with business firms to supply labor, for income, and use their incomes to
buy their goods and services. The first interaction occurs in markets for
resources, second occurs in markets for products.
http://econperspectives.blogspot.com/2008/04/circular-flow-diagram.html
http://en.wikipedia.org/wiki/Circular_flow_of_income
 Households allow Financial sector “Businesses” to hold savings. Pay tax
(direct & indirect) to the Government.
http://wiki.answers.com/Q/In_the_circular_flow_of_the_economy_what_
do_households_do
 http://books.google.com/books?id=TllDu7ibouwC&pg=PA105&lpg=PA105
&dq=capacity+utilization+and+circular+flow+model.&source=bl&ots=cOz
ferUWoX&sig=Y9nmbURZgTfwhZHZFb8vfJAj88k&hl=en&sa=X&ei=1lF8U
J7qIIPo9ASfyIDwDg&ved=0CB0Q6AEwAA#v=onepage&q=capacity%20uti
lization%20and%20circular%20flow%20model.&f=false

How do they work with Aggregate Supply and
Aggregate Demand Models?
 Aggregate demand and supply measure the total demand and supply of goods and services across an
entire economy.
 Aggregate demand simply means spending — spending by households, businesses and governments
for consumption goods and services or investments in structures, machinery and equipment. finding
some way to create jobs and stimulate growth. But the truth is that there really isn’t much we can do.
The only policy that will really help is an increase in aggregate demand. At the moment, businesses
don’t need to invest because their biggest problem is a lack of consumer demand.
 Nonfinancial businesses are now sitting on close to $2 trillion in liquid assets that could be invested
immediately if there was an increase in sales, and banks have $1.5 trillion of excess reserves that could
be lent as well.
 Fiscal policy could raise velocity and growth by getting money moving throughout the economy. But
since that is not feasible, the Fed is the only game in town. Joseph Gagnon, a former Fed economist,
says that it should immediately increase the money supply by $2 trillion and promise to keep
increasing it until the economy has turned around. The right policy can be debated, but the important
thing is for policy makers to stop obsessing about debt and focus instead on raising aggregate
demand.
 Read More: http://economix.blogs.nytimes.com/2011/08/16/its-the-aggregate-demand-stupid/
 Under aggregate analysis, when aggregate demand rises faster than aggregate supply, inflation rises.
Lagging aggregate demand, meanwhile, may be a sign of an economic recession.
http://www.ehow.com/facts_5312128_aggregate-economic-analysis.html

*DEMAND* *SUPPLY*
Consumers willing and able to buy … Producers willing and able to
produce and
make available for sale …
… at each of a series of possible prices during a specific period.
Law of Demand:
As Price increases,
Demand decreases
DETERMINANTS:
•Taste or Preference
•Number of Buyers
•Income
•Normal
•Inferior
•Price of Related Goods
•Substitute
•Complementary
•Independent
•Consumer Expectations
•Price
•Income
Law of Supply:
As Price increases,
quantity supplied increases
DETERMINANTS:
•Resource Prices
•Technology
•Taxes/Subsidies
•Prices of Other Goods/Services
•Producer Expectations
•Number of Suppliers – in pool
2 4 6 8 10 12 14 16
QUANTITY
(in thousands)
P
R
I
C
E
($)
5
4
3
2
1
0
Equilibrium
Price & Quantity
Surplus
NOT
Shortage
NOT

Discussing Business Indicators
Capacity use %
Manufacturing Orders $
(PMI) Composite Index of Conditions %
Wholesale Sales $

79.7%
79.1%
77.7%
77.1%
73.4%
67.1%
65.8%
66.1%
67.6%
69.8%
71.1%
72.3%
72.6%
74.3%
74.4%
74.9%
75.6%
77.5%
77.8%
77.8%
65%
67%
69%
71%
73%
75%
77%
79%
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
2009 2010 2011 2012
2008
Capacity Utilization

60
62
64
66
68
70
72
74
76
78
80
Jan July October December
2008
2009
2010
2011
2012
Capacity Utilization %
d.docs.live.net@SSLDavWWWRootc594ef5be4ece7a7School
EconomiocsEconomics Business Indicators Project Team 1.xlsx

79.7
79.1
77.7
77.1
73.4
67.1
65.8 66.1
67.6
69.8
71.1
72.3 72.6
74.3 74.4
74.9
75.6
77.5 77.8 77.8
65
75
Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00
1 2 3 4 5 6 7 8 9 10
11 12 13 14 15 16 17 18 19 20
TROUGH
PEAK
Measuring Inflation: Old – New / Old = % Increase in Inflation.
Causes: Transportation, War, Politics, Money Supply.
Business Cycle
Measuring Domestic Output: Economic Pulse: Explain why production level is at present level.
Provides info to make policy descions short term and long term.

Explain in detail Capacity Utilization indicator:
The extent to which an enterprise or a
nation actually uses its installed
productive capacity. Thus, it refers to
the relationship between actual output
that 'is' produced with the installed
equipment and the potential output
which 'could' be produced with it, if
capacity was fully used.

What makes up the capacity utilization indicator?
 A businesses plant and equipment do effect short run fluctuations in
demand and they can be used at different capacity utilizations. For
maximum profits.
 The capacity utilization rate measures the proportion of plant and
equipment used in production by the manufacturing, mining, electric and
gas utilizes industries. Used as an indicator of inflation, especially when it
consistently climbs above the 84% level. When factories operate this close
to full capacity, companies are more likely to raise prices.
 Capacity utilization also reveals employment trends. Factories tend to
hire more people or to have employees work more overtime hours
when production is at peak levels.
 Read more here:
http://info.wsj.com/classroom/Indicators/def.data.html

Where and when is the capacity utilization indicator published?
 The Capacity Utilization Rate is released
monthly and is periodically revised along
with the related Industrial Production
number.
 In the United States, both of these economic
data releases usually come out 16 days after
the month ends and come directly from the
Federal Reserve.

Revision of Industrial Production and Capacity Utilization
 The Federal Reserve Board plans to issue its annual revision to the index of
industrial production (IP) and the related measures of capacity utilization
at the end of March 2013.
 The revised IP indexes will incorporate detailed data from the 2011 Annual
Survey of Manufactures, by the U.S. Census.
 Annual data from the U.S. Geological Survey regarding metallic and
nonmetallic minerals (except fuels) for 2011 will also be incorporated.
 The update will include revisions to the monthly indicator (either product
data or input data) and to seasonal factors for each industry. In addition,
the estimation methods for some series may be changed. Any
modifications to the methods for estimating the output of an industry will
affect the index from 1972 to the present.

How reliable is the capacity utilization indicator?
 A reliable indicator of Inflation.
 Depends on the extent of the variation of the system.
 I is A Time Cost Trade off.

What is the significance of the capacity utilization indicator concerning the
economy's position? Lead, Lag or Coincident?
 Leading indicators: usually change before the economy as a whole
changes.[1] They are therefore useful as short-term predictors of
the economy.
 Significance:
 Need to know if a business / resource is Exploited or over-
exploited like the our fishing industry.
 Help define current approaches in an ever changing world
market.
 Help compare to alternative methods of utilization and to
different countries.
 See following for details http://en.wikipedia.org/wiki/Economic_indicator

 By itself, what does the capacity utilization indicator tell your
team about what the economy is doing? Growing, stagnating, or
declining in the long term.
 Like Flocculating, lack of demand. Plenty of supply.
 Class notes to follow: natural real GPA (trend), actual GDP (real output),
downturn or recession, recovery, expansion(same) ,
 Why war decrease our business – sends our resources away. Measuring
domestic output.
 Know economic pulse- measure and explain production is at present level
(short term). And measuring GDP. Slope of a line how quickly something
changes. Independent variable cause or source. Dependant variable
outcome or effect. Calc slop of the line y= mx+ b. Or measure productivity.
 CAUSES: Transportation, War, Politics, Money
Supply.

Describe the activity, according to the data your team gathered, of this capacity
utilization indicator.
 Example: Industrial production fell 1.2 percent in August after having
risen 0.5 percent in July. Hurricane Isaac restrained output in the Gulf
Coast region at the end of August, reducing the rate of change in total
industrial production by an estimated 0.3 percentage point.
Manufacturing output decreased 0.7 percent in August after having
risen 0.4 percent in both June and July. Precautionary shutdowns of oil
and gas rigs in the Gulf of Mexico in advance of the hurricane
contributed to a drop of 1.8 percent in the output of mines for August.
The output of utilities declined 3.6 percent. At 96.8 percent of its 2007
average, total industrial production in August was 2.8 percent above its
year-earlier level. Capacity utilization for total industry moved down 1.0
percentage point to 78.2 percent, a rate 2.1 percentage points below its
long-run (1972--2011) average.
http://www.federalreserve.gov/releases/g17/current/

Notes: Capacity Utilization is up for a second month, pushing past analysts' expectations to stand at
the highest level in more than five years, according to the UMich/Reuters sentiment index; the gauge
rose to 83.1, the highest level since September 2007. http://www.marketwatch.com/economy-politics
(Market Watch) — Producer prices climbed sharply in September for the second month as gasoline
prices jumped, Producer prices rose 1.1% in September after an increase of 1.7% in August, the Labor
Department said. The core wholesale price index, which excludes food and energy prices, was flat in
September after a 0.2% gain in the prior month. Economists surveyed by Market Watch had expected
a 1.0% rise in the headline PPI and a 0.2% increase in the core rate. See Market Watch's
comprehensive economic calendar.
The gain in producer prices, tracking the level of inflation at the wholesale level, was due to
continued higher energy costs — particularly gasoline. Energy prices advanced 4.7% in September
after having risen 6.4% in August. A 9.8% gain in gasoline prices accounted for more than 80% of the
September gain, the Labor Department said.
Food prices rose 0.2% in September, for the fourth consecutive increase. Analysts said the impact of
the severe drought in the Midwest is slowly filtering up the production chain. Read the full
government report.
Treasury prices /quotes/zigman/4868283/delayed 10_YEAR 0.00% turned up modestly and the dollar
/quotes/zigman/1652083 DXY -0.14% edged lower after the report was released. In the core price
index, higher prices for light motor trucks were offset by declining prices for communications
equipment.
Compared with a year ago, the producer price index is up 2.1%, the highest level since March. Core
prices are up 2.3% over the past 12 months.
http://www.marketwatch.com/economy-politics The economy AT A GLANCE

Manufacturing Orders $
 To away with Highlight key words), but it makes .

Man Orders
$-
$10
$20
$30
$40
$50
$60
$70
2009 2010 2010 2012 2013

$30
$35
$40
$45
$50
$55
$60
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
2008
2009
2010
2011
2012
Manufacturing Orders

Explain in detail the indicator here:
 W
 To away with Hightlights key words), but it makes .

What makes up the indicaor?
 W

Is the indicator revised later or does it stand as it is reported?
 W
 To away with Highlights key words), but it makes .

What is the significance of the indicator concerning the economy's position?
Lead, Lag or coincident?
 Leading Indicator - Manufacturers' new orders for consumer
goods/materials .

How reliable is the indicator?
 W

Where and when is the indicator published?
 W
 To away with key words), but it makes .

Describe the activity, according to the data your team gathered, of this
indicator.
 W

By itself, what does the indicator tell your team about what the economy is
doing?
 W

Composite Index Industrial Conditions %
 W

 To away with key words), but it makes .

What makes up the indicator?

Is the indicator revised later or does it stand
as it is reported?
 To away with Hightlights key words, but it makes.

What is the significance of the indicator concerning
the economy's position? Lead, Lag or coincident?
Leading indicators are indicators that usually change before the economy as a whole changes.[1]
They are therefore useful as short-term predictors of the economy. Stock market returns are a
leading indicator: the stock market usually begins to decline before the economy as a whole
declines and usually begins to improve before the general economy begins to recover from a
slump. Other leading indicators include the index of consumer expectations, building permits,
and the money supply.[citation needed] The Conference Board publishes a composite Leading
Economic Index consisting of ten indicators designed to predict activity in the U. S. economy
six to nine months in future. Lagging indicators are indicators that usually change after the
economy as a whole does.
 Coincident indicators change at approximately the same time as the whole economy, thereby
providing information about the current state of the economy. There are many coincident economic
indicators, such as Gross Domestic Product, industrial production, personal income and retail sales. A
coincident index may be used to identify, after the fact, the dates of peaks and troughs in the business
cycle.[2]There are four economic statistics comprising the Index of Coincident Economic
Indicators:[citation needed] Number of employees on non-agricultural payrolls Personal income less transfer
payments Industrial production Manufacturing and trade sale
See following for details http://en.wikipedia.org/wiki/Economic_indicator

How reliable is the indicator?
 To away with Highlights key words, but it makes.

Where and when is the indicator
published?
 To away with key words, but it makes.

Describe the activity, according to the data
your team gathered, of this indicator.

By itself, what does the indicator tell your
team about what the economy is doing?

WHOLE SALE SALES $
 To away with key words), but it makes.
 http://www2.census.gov/wholesale/pdf/awts/2010_awts_salesinv_table1.pdf
 Release Date: On or around the 9th of the month
 Release Time:10am Eastern Standard Time
 Coverage: Two months prior (report released six weeks after period end)
 Released By: U.S. Census Bureau
 Latest Release: http://www.census.gov/mwts/www/currentwhl.html
 Strengths:
 There is an Annual Benchmark Report for Wholesale Trade released every spring that includes more detailed information such as annual sales
estimates and gross margins for the industries that are sampled in the monthly report
 Provides a good snapshot of the "middle" of the supply chain for many industries - up the channel from manufacturing, but not yet retail.
 A good indicator of supply/demand imbalances
 Long time series (since 1946) available
 Data provided "raw" and with seasonal adjustment
 Weaknesses:
 Longer time lag than most
 Industry breakdowns not too specific
 The previously-released Durable Goods report will have already shed some light on wholesale results
 The Closing Line : Monthly Wholesale Trade Report is not potent enough to move the markets, but it is very useful when taken in context
with other industry-specific indicators to gauge sales and demand; it is also helpful in predicting quarterly gross domestic product (GDP)
figures.
Read more: http://www.investopedia.com/university/releases/wholesaletrade.asp#ixzz29GFzqXT7
Read more: http://www.investopedia.com/university/releases/wholesaletrade.asp#ixzz29GFhuzBp

What makes up the indicator?

Is the indicator revised later or does it stand as it is
reported?
 To away with key words), but it makes.

What is the significance of the indicator concerning the
economy's position? Lead, Lag or coincident?
 To away with Hightlights key words), but
it makes.
 Leading Lagging or Coincident
 Which one: See following for details
http://en.wikipedia.org/wiki/Economic_indicator

How reliable is the indicaor?

Where and when is the indicaor published?

Describe the activity, according to the data your team
gathered, of this indicaor.

To By itself, what does the indicator tell your team about
what the economy is doing?
 away with Hightlights key words, but it makes .
 The economy started crtashing about 2004 it started notcibley getiing in trouble numbers became
available. About 2010 it started to slowly climb out – America eliminate the middle class. Middle class
keeps balance. France they got real poor or real rich no middle class. Socialism makes poor poorer like a
3rd world counrty. We must learn to embrace the middle class it is going to be to deep of a dive. Crime
goes up more. Haves and have nots hungry now. Steve jobs hoome was unlocked when alive they robed
him. They walked right in you think he would understand because when our parents were young you cant
leave now economy this way. Money not goin to far. 3 dollar beead loff. If people had notice food up
salaries not keeping up with groceries. Go back 2 weeks later up 1 dollar but no raise at work. I have to
buy and not prosper now. Product up and decreasing volume now. Nmnow 123 pk now 8 pk still charging
for 12. they getting ricjhher we getting pooreer. You must have a plan you must have a oplan you will
spend it all upo. Pay into 401k wait to receive money. 10 20 yrs agfo is not prospering now. Sams fill up
car loaded dowm. Now a few bags. People of power will get reidhcer. Leaders stop bickering power
struggle dangerous. Highways falling apart. Put them to work. Politiacl games suffer. Meet everyday. Put
peole to work. Drain systems in jax all stoped up floods. 3 day rain we flodded now. No workers gutting
grass, clearing pipes ect. I didn’t go with nowne of the foolsi in washington. Peole do need help. Walmart
will keep you poor to not give benefits no full time work. Work at Walmart be on maedicaid now. They
control temp in store from arkansa in all store, inefficent cant turn on air selfs keeping control. Millions
earned low pay. Walmart tried to hide the no insurance no benits jobs. Thsy will hold those 2hrs back. N
reason to lack in this world pleanty of resources. Share one haad wah another give up some of the power.
Presisdt 1 millon paid spent millions to get job for the power. Comerical to gget a job for 1 mill. Spent it is
a mess mess emss.

Definition of Business Indicator can be seen here
http://en.wikipedia.org/wiki/Economic_indicator

Suggest how to make the economy grow HERE

Category 100% 75% 50% 25%
Structure
10 % Cover Page Abstract
Introduction Body
Conclusion Appendix
Bibliography
Structure is complete and shows clear,
logical, relationships between all topic
and subtopics.
Structure is complete and shows
clear, logical relationships between
most topics and subtopics.
Structure is started and includes
some topics and subtopics.
Structure and topics are just
attempted.
Organization, Spelling, and
grammar
10%
Information is very organized with well-
constructed paragraphs & headings. No
spelling & grammar errors
Information is organized with well-
structured paragraphs. Few spelling
an grammar errors.
Information s organize, but not
well constructed Some spelling
and- grammar errors.
Information appears to be
disorganized. Spelling and
grammar errors.
Quality of information
40%
Full 4-sentence paragraphs
Information clearly relates to the main
topic. It includes 3 or more supporting
and/or examples.
Information clearly relates to the
main topic. It provides 1-2
supporting details and/or examples.
Information clearly relates to the
main topic. No details and/or
examples given.
Information has little or nothing to
do with the main topic.
Quantity of Information
30%
Outline
All questions are addressed and
answered.
Most questions are addressed and
answered.
Some questions are addressed and
answered.
One or more topics were not
addressed.
Sources
5%
All sources (information and graphs) are
accurately documented in APA format.
All sources (information and graphs)
are accurately documented, but few
are not in APA format.
All sources (information and
graphs) are accurately
documented, but many are not in
APA format.
Some sources are not accurately
documented.
Smart inking
5%
Paper submitted, return comment sheet
included, corrections made.
Paper submitted, return comment
sheet included.
Paper submitted. Paper not submitted.
Total Points
Paper Grade Sheet Paper: _________________ Student
___________________

APA STYLE CITING RQUIRED
Be sure to site graphs too
http://owl.english.purdue.edu/owl/resource/560/01/
What did you use to gather info?
Which info or organizations did Info come form?
Include entire sight if on the web so we can fing it.
Helpful sights not used yet
www.bea.gov www.uscensus.gov
http://www.gpo.gov/fdsys/pkg/ECONI-2012-
07/pdf/ECONI-2012-07-Pg17.pdf
http://www.aicpa.org/InterestAreas/BusinessIndustryAndGovernment/NewsAn
dPublications/DownloadableDocuments/3Q_2012_EOS_Slides.pdf
http://www.aicpa.org/InterestAreas/BusinessIndustryAndGovernment/NewsAn
dPublications/DownloadableDocuments/3Q_2012_EOS_ES.pdf

Capacity Use
2007 http://www.gpo.gov/fdsys/pkg/ECONI-2007-12/pdf/ECONI-2007-12-Pg17.pdf
2011http://www.gpo.gov/fdsys/pkg/ECONI-2011-12/pdf/ECONI-2011-12-Pg17.pdf
2012http://www.gpo.gov/fdsys/pkg/ECONI-2012-08/pdf/ECONI-2012-08-Pg17.pdf
ISM Manufacturing Report on Business® PMI History 1948-2012
http://www.ism.ws/ISMReport/content.cfm?ItemNumber=10752&navItemNumber=129
61
U.S. Manufacturing Corporations
Seasonally Adjusted Quarterly After-Tax Profits (Billions of dollars)
2001-2012
http://www2.census.gov/econ/qfr/current/qfr_mg.pdf
Estimated Sales and Inventories of U.S. Merchant Wholesalers:
2002-2010
http://www2.census.gov/wholesale/pdf/awts/2010_awts_salesinv_table1.pdf
Indicators
http://www2.census.gov/wholesale/pdf/awts/2010_awts_salesinv_nomsbo_ta
ble2.pdf

Michele Kirchaine kircml1@students.fscj.edu 300-5175
Liana greatdane836@yahoo.com 253-0014,
Lofton loftonm28@yahoo.com 210 6339,
Misty Mzoerner2011@yahoo.com 832 477 8507
http://www.usdebtclock.org/

Business indicators presentation team 1 michele^j misty^j lofton and liana

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