How does GDP affect inflation rate and unemployment rate?
There are several indicators the government uses as broad measures of emerging economic trends. They include: composite leading index, housing starts, consumer price index, retail sales volume, merchandise exports/imports, changes in employment figures as well as unemployment rate and GDP. The indicators are monitored and used to anticipate the onset of the start and the end of recessions a few months in advance. Steady gains in one area can make large shifts in any specific industry. For example; higher gas prices can slow auto sales and dampen demand for larger vehicles which trigger manufacturer layoffs. Economists take into account seasonal adjustments (retail sales volume increases for October to December) when assessing major changes in any one of the indicators (eg: the sudden increase in the value of the goods and services within a certain industry class). Rising or falling prices for any one commodity can become an concern as it can have a dominoe affect on other commodities t
