Barometer

DEFINITION of 'Barometer'

A compilation of market and economic data that represents a general or larger trend. Examples of economic forecasting barometers include consumer spending, housing starts and interest rates. Standard & Poor's 500 Index and the Dow Jones Industrial Average can be considered stock market barometers.

BREAKING DOWN 'Barometer'

Some economic barometers include the sale of certain pieces of clothing or certain types of food. An economic indicator for which direction the trend of consumer spending is going is the sale of items such as makeup, men's underwear, spam and the sale of vegetable seeds and transplants. For example, an increase in the sales of vegetable seeds, during a recession, indicates that people are more motivated to save so they will tend to grow vegetables instead of buying them.

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