Truls Ljungström’s Reviews > Guide to Economic Indicators: Making Sense of Economics - Sixth Edition > Status Update

Supply shock (or cost push). Prices are pushed up by higher wage and raw materials costs, Demand pull. Prices are pulled up when spending power (demand) is greater than the availability of goods and services.

For example, if export prices rise by 5% and import prices rise by 2%, a given volume of exports buys roughly 3% more imports; the terms of trade have improved by 3%.

Förväntad tillväxt detaljister: 3% a year is reasonable; any lower and the economy might slow down. More than 4–5% suggests overheating.

A housing completion implies a house sale, a new mortgage advance and increased consumer demand for carpets, furnishings and other durables – possibly accompanied by extra consumer credit.

Capacity use. Capacity use is usually defined as output divided by sustainable maximum capacity. Sustainable maximum output is lower than temporarily attainable peak production, so use of (sustainable) capacity can and occasionally does exceed 100% in some industries.

Stockappreciation & Stockbuilding

Loosely, if planned savings exceed planned investment, stocks pile up and companies cut back their production: gdp falls. If planned savings are less than planned investment, companies produce more to meet the extra demand and gdp rises.

There is a cyclical pattern in consumer expenditure. The most volatile component is spending on durables.

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