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There is voluminous information and statistics put out by government agencies, non-profits, private companies and pundits as they track the economy. However, there are some basic key indicators that economists and government officials rely upon, and you should be aware of what they are.

Listed below are some of the most important indicators to watch.

GDP. Gross Domestic Product is the broadest of the nation's measurement, updated by the Bureau of Economic Analysis. GDP is the market value of all final goods and services produced in the nation during a certain time period, measuring the health and wealth of the economy. About two-thirds of our GDP is driven by individual consumption, not by business or government. The Federal Reserve uses the data (with other data & indicators) to help determine their actions on interest rates.

A recession is officially defined as negative growth in the GDP for two or more successive quarters. Technically, our current recession has ended since the GDP was up in the third and fourth quarter of 2009. After retracting 6.4% in the first quarter of 2009 and then 0.7% in quarter two, the economy grew 3.5% in the third quarter and 5.7% in the fourth quarter. (Source: U.S. Department of Commerce, Bureau of Economic Analysis).

S&P 500 Stock Index (S&P 500). The Standard and Poor's 500 is made up of major companies in various industries (financial, industrial, utilities, transportation). This is a market value-weighted index of large-cap common stocks and their performance is thought to be representative.This basket of stocks has become one of the industry benchmarks. A declining index (as we dramatically saw last year) can sometimes signal a tightening of belts for businesses and consumers and related problems in the economy (or credit markets, for instance). While the index dropped more than 40% in 2008, the average in 2009 stood at 13.6% and to date in early 2010 it is increasing further.

Consumer Price Index (CPI). CPI is an inflationary indicator. It measures the average changes in the prices paid for a fixed basket of goods and services, and is sometimes a tool for measuring the cost of living. CPI includes food & beverages, housing costs, clothing, medical care, utilities, education and transportation (among other products or services). It does not include income, investments in stocks or bonds, life insurance or social security taxes. The January 2010 CPI rose 0.2%; in 2009, the index increased 2.6% before seasonal adjustments. (Source: U.S. Department of Labor, Bureau of Labor Statistics)

Current Employment Statistics (CES). CES is the data on national employment, unemployment, and non-agricultural industries, and the information is released monthly. Employment statistics are an early indicator of economic trends, level of business activity and health; yet they are usually the trailing or lagging indicator coming out of a recession. Unemployment is an issue today while some other areas of the economy have recovered. (Source: U.S. Department of Labor, Bureau of Labor Statistics)

Housing Starts.Formally known as the new residential construction index, this data represents new construction projects started (issued monthly). The data is highly sensitive to changes in the mortgage rates, general business health, and because it is represents about 4% of the GDP, it can signal changes in the economy. According to the Congressional Budget Office (document 3183), housing starts peaked at over 2.1 million in the first quarter of 2006 (helped by low interest rates and easy lending standards). By the 2nd Quarter of 2008, the starts were cut almost in half to 1 million, and decreased to 900,000 in the 3rd Quarter. Housing start recovery will depend upon clearing out excess inventory, demand, access to credit and unemployment. (Source U.S. Department of Commerce, Census Bureau).

Consumer Confidence Survey. Finally, this is the temperature of the public's confidence about the U.S. economy and situation. The survey shows either optimism or pessimism of consumers. Five questions are asked of a random sampling of 5,000, and the data is released monthly. While still mixed and relatively low, the index has risen for three consecutive months, standing at 55.9 in January 2010.

Kathy writes about commercial real estate and the overall economy. She is President of a commercial real estate firm, Legacy Real Estate & Investments, and author of "Effortless Cash flow: the ABCs of TICs (Tenant in Common Properties)" and "Investing in Oil & Gas: the ABCs of DPPs". Kathy is working on a new real estate book for 2010.

Climate Change Factoid - How Do We Fix It – Part One? (# 10 of a series)

We may need two fixes. One for the short term, an indispensable step, and the other for the long term, also indispensable but it might not look like it to many of us. First, the short term fix because, if we don't fix this part of climate change there's good reason to doubt we will be here long enough to need the long term fix.

The extra CO2 we have sent up into the atmosphere will not be going elsewhere for thousands of years. That means the CO2 we have added to the atmosphere will stay right where it is, continuing to reflect heat back toward the planet, thereby insuring the already established trend of increasing heat will continue its growth, melting the glaciers and polar caps and causing all of the various aspects of weather to become increasingly extreme. In short, earth's environment approaches outright hostility to human life.

Since there is no natural mechanism in nature that could move the extra CO2 from the atmosphere to somewhere else, at least before it gets too hot for us to live here, we will need to do this work ourselves. There are technologists already at work developing devices called “scrubbers” which can remove CO2 from the atmosphere. As of now, the technology is still primitive but, right now, the important thing to know about it is that at least in principle, it seems to work.

Removing the extra CO2 from the atmosphere is only part of the job, probably the easier part. Several years ago I saw a demonstration of the technology where atmosphere, containing CO2, was forced through a solution of sodium hydroxide (lye) and when the air was drawn out of the chamber the CO2 was left behind having bonded chemically to the lye. Since then the technology has taken several additional steps forward. Once removed from the atmosphere, the CO2 must be combined with something that will keep it stable as either a semi-solid or liquid and which prevents it from returning to a gaseous form which would enable its escape to the atmosphere. Simply combining CO2 with freezing water, emulating methane hydrate found in permafrost, which has been successfully sequestered from the atmosphere for millions of years, might work. Once in this semi-solid form, the whole mess could be pumped below ground through the same pipes we used for sucking the oil out of the earth into the cavernous expanses left over when the oil was removed. Although this part of the technology is yet to be proven, there, below ground, hopefully, it would remain forever but if some did escape, we would still have our “scrubbers” in place to do the job again. The procedure of pumping the CO2 underground is called “sequestration.”

For me, there is something very poetic about us being faced with having to put all of this stuff back where we found it. Why do I feel like my Mom (Mother Earth in this case) has just told me that if I don't clean up my space and put everything back where it was, I won't be allowed to hang around anymore. If you like irony, when the cost of doing this work is fully realized, we may also discover that much, if not all, of the wealth created by the burning of fossil fuels was illusory because it must now be spent putting this stuff back where we found it. What we thought was profit was actually a huge contingent liability that we chose not to recognize back then. Instead we deferred payment of the bill to future generations. A nice little legacy for the kids.

And then there's the part I find the most interesting about all of this. Once we think about “scrubbing and sequestration” for awhile we will suddenly realize that even though the cost will take our breath away, the solution offers a less expensive option than changing everything we do now that contributes to advancing climate change. We could start scrubbing and sequestering and when the level of CO2 returned to pre-industrial levels we could keep some of the scrubbers running to deal with future CO2 emissions. We could continue to burn oil – wouldn't that be swell? Check out Factoid #14 - “How Do We Fix it - Part Two?”, to find out why that may not work, either.

 

(Peer reviewed research, supporting the claims made in this factoid, can be found at the website,)

About the Author

Rich Albertson is a retired lawyer, author, builder, building designer, carpenter and long time amateur naturalist. He lives in Portland, Oregon.

Albertson's most recent book (2009), “The Sky is the Limit – A Brief and Easy Explanation of Climate Change for Present and Future Voters” (134pp), is an explanation of the science, economics, politics and a discussion of the future of climate change written for people of average experience. Climate Change Factoids are drawn from the book. His first book (1978), “The Bio-Conversion of Waste to Resource” (4 Vols, 2624pp), was a treatise on methods for the sustainable management of solid and liquid waste in urban society. More about the Sky is the Limit book can be found at http://www.thecircleworks.org

As a Naturalist, Albertson's primary interest is to understand and then explain the conflicts that result from modern human practices that interfere with the operation of the natural world on a planetary scale.

Has Obama already cemented his legacy by ?

Has Obama already cemented his legacy by spending more of our money in only 18 months than any other President ever did in US History & by exploiting the oil spill in order to promote his own agenda to impose the largest Tax Increase in the History of the World through his massive " Cap & Trade " Tax ?
future - let me guess ? You are one of those believe who believed Obama when he said his Health Bill would pay for itself an would not cost us on cent more than we were paying ?

And now......you are shocked to learn that Obamacare will really cost us tens of billions of dollars more than he BHO claimed it would !

Everybody calls him Carter Jr. I think we should change that to Carter on steroids.

The other tragedy
IN my meeting with the CIEM economists on Tuesday, July 13, I talked of the excellent documentary by the French director Yann Arthus-Bertrand, with the participation of the most eminent and well informed international figures, on the other terrible danger to the human species which is taking place before our eyes: the destruction of the environment.

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