Real GDP 3-5%

Unemployment Rate 5%Further it goes under thisRate, the higher the inflation rate

Inflation Rates- 0-2%

CPI and PPI- 0-2%

Mr. Perfect Economy

• Lower unemployment the higher the inflation rate. There is increased buying power.

• Higher unemployment lower inflation rate. There is decreased buying power.

Indicators

(Future) Leading Indicators• Average weekly hours in manufacturing• Unemployment claims per week• New orders for consumer goods• ISM Index of New Orders• Manufacture’s new orders non defense

capital goods excluding aircraft orders• new private housing unit permits• Stock prices, 500 common stocks• Leading Credit Index• Interest rate spread 10 year treasury

bonds less federal funds• Average consumer expectations for

business conditions

Coincidental Indicators (Present)

• Number of employees on non-agricultural payrolls

• Personal income less transfer payments

• Industrial production• Manufacturing and trade

sale

Lagging Indicators (Past)• Quarterly Reports from

Businesses • Annual Reports from

businesses

• Stagflation- High Unemployment and High Inflation

• Hyperinflation- Inflation increasing by 100% or more.