Forecasting GDP
Now that we know the timely indicators to help us predict the GDP. We can look into forecasting the GDP and how it is done using the BMC. If we go back to the WEC and take a look at the relevance of each indicator. Here we can see that indicators like PMI which we discussed are highly recommended for investors to look at. Along with the survey column to see what analyst have forecasted for this specific indicator. If we take a look at PMI for example we can right click on the survey for that indicator and see how that was formulated by the economists. The ECOS (Economic Estimates) function shows the exact workings of how this is done. We can see if the estimates were being hopeful for the month or pessimistic by the actual results right next to it.
A key part of forecasting are the people who do the estimating, they are the economist. They do two things that are very important to the whole process. First they maintain the estimates of what they believe the economic indicator values will be and second they form opinions on the longer-term future on the most important statistics in the financial world like GDP, inflation, and unemployment. The later is really important …show more content…
You have to use the information available to you and use several of the major indicators to help predict the GDP before it is published. You can do this by using the ECSU ( Economic Surprise Monitor) and pick the most important. The info given to you using this function consist of date published, actual, and level of surprise. This is how much better or worse the actual was in comparison to the estimates given by the economists. On the right hand side of the function you will see a graph with red and green on it. The red areas are the times during the time period you are looking at where there was more negative surprise then good surprise and vice versa where you see
Now that we know the timely indicators to help us predict the GDP. We can look into forecasting the GDP and how it is done using the BMC. If we go back to the WEC and take a look at the relevance of each indicator. Here we can see that indicators like PMI which we discussed are highly recommended for investors to look at. Along with the survey column to see what analyst have forecasted for this specific indicator. If we take a look at PMI for example we can right click on the survey for that indicator and see how that was formulated by the economists. The ECOS (Economic Estimates) function shows the exact workings of how this is done. We can see if the estimates were being hopeful for the month or pessimistic by the actual results right next to it.
A key part of forecasting are the people who do the estimating, they are the economist. They do two things that are very important to the whole process. First they maintain the estimates of what they believe the economic indicator values will be and second they form opinions on the longer-term future on the most important statistics in the financial world like GDP, inflation, and unemployment. The later is really important …show more content…
You have to use the information available to you and use several of the major indicators to help predict the GDP before it is published. You can do this by using the ECSU ( Economic Surprise Monitor) and pick the most important. The info given to you using this function consist of date published, actual, and level of surprise. This is how much better or worse the actual was in comparison to the estimates given by the economists. On the right hand side of the function you will see a graph with red and green on it. The red areas are the times during the time period you are looking at where there was more negative surprise then good surprise and vice versa where you see