It's one of the most important economic indicators. Its value may trigger long-lasting changes in
monetary and foreign policies. The trade balance consists of the net difference between the
exports and imports of a certain economy. The data includes six categories:
1. food,
2. raw materials and industrial supplies,
3. consumer goods,
4. autos,
5. Capital goods,
6. Other merchandise.
A separate indicator that belongs to that group is the "US - Japan Merchandise Trade Balance".
Employment Indicators
The employment rate is an economic indicator with significance in multiple areas. The rate of
employment, naturally, measures the soundness of an economy (See Figure 3.1).
The
unemployment rate is a lagging economic indicator. It is an important feature to remember, especially in times of economic recession. Whereas people focus on the health and recovery of
the job sector, employment is the last economic indicator to rebound.
When economic contraction
causes jobs to be cut, it takes time to generate psychological confidence in economic recovery at
the managerial level before new positions are added.
At individual levels, the improvement of the
job outlook may be clouded when new positions are added in small companies and thus not fully
reflected in the data. The employment reports are significant to the financial markets in general
and to foreign exchange in particular. In foreign exchange, the data is truly affective in periods of
economic transition-recovery and contraction. The reason for the indicators' importance in
extreme economic situations lies in the picture they paint of the health of the economy and in
the degree of maturity of a business cycle. A decreasing unemployment figure signals a maturing
cycle, whereas the opposite is true for an increasing unemployment indicator.