Rama Krishna Vadlamudi
November 17th, 2009
US Economy has recently come out of recession by showing a GDP growth of 0.9 per cent (3.5 per cent annualized) for the July-September 2009 quarter compared to the quarter of July-September 2008. This is seen as a sign of US economic recovery by many experts. However, US unemployment rate continues to go up touching a high of 10.2 per cent in October 2009. In October, the number of unemployed persons increased by 558,000 to 15.7 million. The unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points. In the light of the above developments, it would be better to watch certain important economic indicators while the US is showing some signs of slow economic recovery. The following are some important indicators worth monitoring:
TOP TEN US MACRO-ECONOMIC INDICATORS 1 2 3 4 5
US Gross Domestic Product (GDP) growth rate US Stock indices - Dow 30 and S&P 500 US Unemployment Rate US Sales Figures like, auto, home and retail sales Prices of crude oil, gold, base metals, etc
6
Interest rate & policy actions and comments from the US Fed and US Treasury Secretary US Dollar Index against major currencies - Pound, Euro, Yen, etc CBOE VIX Volatility Index (Chicago Board Options Exchange) US Inflation Rate CPI (at this point this is not a concern)
7 8 9 10
US Treasury Yield Curve (difference between two-year and 10-year US Treasury note yields) Notes: These are not necessarily in the order given above. The degree of seriousness depends on the prevailing situation at that particular time. Developments on the WTO front and trade protectionism also need to be monitored. This is only an indicative list and the indicators keep changing from time to time due to the dynamic nature of world economy. Actions of other central banks in the UK, euro zone, China, Australia and other important G-20 countries also need to be watched.
Rama Krishna Vadlamudi, BOMBAY.
www.pdfcoke.com/vrk100.
Nov. 17, 2009
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