It would be easy to guess that the upturn is losing strength, although on the surface it still appears powerful. Its very duration indicates that.
There are four major economic statistics that help identify where the nation stands in relationship to the business cycle. Our country's top policy-makers in government, industry and education rely on these statistics for critical guidance.
- Gross National Product. This is the big one. It's the total of all goods and services produced in the country - in short, an overall measure of whether the economy is growing, and if so, how quickly.
``The quarterly GNP numbers are absolutely vital to all of us,'' Prof. Paul Samuelson of MIT says. ``It's impossible to plan anything without them.''
If the economy is growing too rapidly, it is in danger of ``overheating,'' which is to say maintaining a rate of growth that it can't possibly sustain. This results in corrective action, such as tightening of credit by the Federal Reserve system. If growth of the GNP slows or worse, actually declines, times are rough. If the GNP shows two consecutive quarters of decline, it constitutes a recession.
- Consumer Price Index and Producer Price Index. These monthly statistics measure the pace of inflation or deflation; the former at the retail level, the latter at the wholesale level. The PPI leads the CPI in that if retailers have to pay more for products and raw materials, the consumer is ultimately likely to have to pay more, too. These figures have been relatively unexciting in the last few years, but in the late 1970s and early '80s (a time of double-digit inflation) they were crucial.
- Employment figures. The most widely reported employment statistic is the monthly unemployment figure, which is interpreted as the percentage of American workers who are seeking jobs. …