There is no shortage of statistics for economy watchers in Washington. Indicators of the nation's economic health are published frequently by many different branches and agencies of the federal government and reported in the business and financial pages of daily newspapers.
But how much can each of them tell the reader?
One of the best known and most avidly followed statistical series--the Consumer Price Index--is also one of the most confusing. Published monthly by the Bureau of Labor Statistics in the Labor Department, the CPI actually measures the price each month of a basket of certain consumer goods and services bought in various parts of the country. It shows how their price has changed relative to previous months and years.
Many people call it "the inflation rate." But the CPI can be used to work out the inflation rate, or the rate of price increase, over one month, three months, a year, or any other time period. There is no one inflation rate given by each month's CPI index number.
Moreover, the CPI is probably not the best measure of inflation. It exaggerates the effect on the average person's cost of living of changes in the cost of owning a home, particularly changes in the mortgate interest rate.
The Producer Price Index, also published monthly by BLS, gives a guide to cost increases in the pipeline that have not yet hit the consumer. It shows average price changes for raw materials, intermediate production goods and wholesale manufacturing goods.
As well as being influenced by the cost of raw materials, the final prices that consumers pay are crucially affected by wage levels. BLS is also responsible for collating monthly figures on hourly and weekly earnings.
Another closely watched indicator is the level of unemployment. Each month a survey of households is carried out to determine how many people would like to work but cannot find a job. They are then subdivided by age, sex, race and state.
Supplementing the information on the state of the job market given by the unemployment figures is the employment report, gathered monthly from both the household survey and a payroll survey of firms.
Other important monthly data on the domestic side of the economy include the industrial production figures published by the Federal Reserve, and the leading indicators of the Commerce Department. The first series records the output of the nation's mines and factories, broken down by industry. It shows month by month which industries are growing and which are not, and gives a good guide to output in the economy as a whole. However, the index does not cover the large service sector of the economy, producer of things such as restaurant meals and banking and the government sector.
The leading indicators are a composite of economic measures such as money supply, numbers of industrial layoffs, and raw materials prices, which is supposed to tell how the economy is likely to move in the future.
The Commerce Department also publishes balance of payments and foreign trade figures on a regular basis--monthly for trade and quarterly for the balance of payments. The monthly data show how much the United States is buying from and selling to the rest of the world, and the quarterly figures also detail the capital transactions.
The Bureau of Economic Analysis in the Commerce Department publishes the gross national product figures for each quarter, as part of the national accounts. These accounts give the broadest measures of what is happening to output, incomes, investment, savings, and prices in the whole of the economy.