Economic Forecasting

DEFINITION of 'Economic Forecasting'

The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators. Some of the most well-known economic indicators include inflation and interest rates, GDP growth/decline, retail sales and unemployment rates.

BREAKING DOWN 'Economic Forecasting'

While economic forecasting is not an exact science, it remains an important decision-making tool for businesses and governments as they formulate financial policy and strategy.

RELATED TERMS
  1. Economic Conditions

    The state of the economy in a country or region. Economic conditions ...
  2. Indicator

    Indicators are statistics used to measure current conditions ...
  3. Economic Indicator

    An economic indicator is a piece of economic data, usually of ...
  4. Comps

    A buzzword that refers to a retail firm's comparable same-store ...
  5. Multivariate Model

    A popular statistical tool that uses multiple variables to forecast ...
  6. Coefficient of Determination

    A measure used in statistical model analysis to assess how well ...
Related Articles
  1. Options & Futures

    Trading Around Key Options Indicators

    Learn the key economic indicators to help predict market movement.
  2. Economics

    Understanding Forecasting

    Forecasting is the use of historical data to predict the future.
  3. Investing Basics

    What is an Indicator?

    Investors use indicators to measure economic conditions and forecast financial and economic trends.
  4. Personal Finance

    The Basics Of Business Forecasting

    Discover the methods behind financial forecasts and the risks inherent when we seek to predict the future.
  5. Economics

    Understanding the Unemployment Rate

    The unemployment rate is the percentage of people in the labor force who are unemployed but seeking a job.
  6. Investing Basics

    Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.
  7. Economics

    Explaining Economic Indicators

    Investors use economic indicators to gauge investment opportunities and judge the overall health of an economy.
  8. Economics

    Healthiest And Safest European Economies

    Economic indicators are to economists what symptoms are to doctors: signs of the relative well-being of the patient.
  9. Fundamental Analysis

    4 Key Indicators That Move The Markets

    Find out what reports to watch in order to anticipate and react to market movements.
  10. Economics

    Understanding Regression

    Regression is a statistical analysis that attempts to predict the effect of one or more variables on another variable.
RELATED FAQS
  1. What economic indicators are important to consider when investing in the retail sector?

    Learn why the unemployment rate and Consumer Confidence Index are two of the best economic indicators when investing in the ... Read Answer >>
  2. What are leading, lagging and coincident indicators? What are they for?

    An indicator is anything that can be used to predict future financial or economic trends. For example, the social and economic ... Read Answer >>
  3. What is the difference between financial forecasting and financial modelling?

    Understand the difference between financial forecasting and financial modeling, and learn why a company should conduct both ... Read Answer >>
  4. What is the difference between market indicators and economic indicators?

    Read about the differences between technical market indicators and general economic indicators, and learn how traders and ... Read Answer >>
  5. What variables are most important when making a prediction through sensitivity analysis?

    Explore sensitivity analysis and how this method considers different variables to determine a course of action based on statistical ... Read Answer >>
  6. Do rising unemployment rates tend to increase or decrease investor sentiment and ...

    Discover whether rising unemployment rates tend to increase or decrease consumer confidence and investor sentiment. Unemployment ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center