Economic Forecasting

This week’s reflection identifies ways to use past economic data to forecast economic activity in a given region or country. Forecasting economics is like reading palms, it’s all really just a guessing game. However, there are ways to provide the most educated guess possible and utilizing past economic data is very useful in these analyses. Team A identified different sources that can be used in accomplishing this task.

The first source Team A identified is commonly known as FRED (Federal Reserve Economic Database). According to “Economic Research” (n.d.), “Federal Reserve Economic Data, FRED is an online database consisting of more than 156,000 economic data time series from 61 national, international, public, and private sources.” They include, but are not limited to, TOTALSEC under banking which collects commercial credit and CPIAUCSL under consumer prices, which collects CPI and IMPGS under GDP and components which records exports as well as imports. They also allow the information given to be viewed in text as well as in the form of a graph, which makes it visually easier to compare data. What makes FRED useful and valuable is that it covers area’s like business/fiscal, employment and population, consumer price indexes, exchange rates, monetary aggregates, banking, gross domestic product (GDP), past and present data, among a few others. The graph also with current data would make it easier to make future forecast.

Another important source identified by Team A is known as ALFRED. Archival Federal Reserve Economic Data (ALFRED), which went live in 2006, allows users to retrieve vintage economic data from a particular day in history. The availability of the vintage data is in 155,081 series throughout 9 categories: (1) money, banking, & finance, (2) academic data, (3) population, employment, & labor markets, (4) national accounts, (5) production & business activity, (6) international data, (7) prices, (8) greenbook projections, and (9) U.S. regional data. According to “Alfred” (2014), “Vintage or real time economic data allows academics to reproduce others’ research, build more accurate forecasting models, and analyze economic policy decisions using the data available at the time.” This within itself makes ALFRED both useful and valuable.

An additional source that can be used is the U.S. Department of Commerce Bureau of Economic Analysis. This source has information regarding the economy by providing relevant and reliable economic data. This source has statistics that can help researchers and the general public to understand the performance of the current economy. Information about the GDP can be found along with other resources that will be able to help us research economical resources. Data is collected from different industries where methodology is used to produce a benchmark on the GDP. The reports are generated quarterly where they are then output to illustrate where the