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An indicator that is useful must be accurate, timely and reliable. It depends entirely on the integrity of the national statistical system responsible. It is vital to know the accurate components of an indicator. We have to be mindful of the limitation of these statistical figures too.
Some indicators can be historic or extremely volatile, and therefore their value are reduced. It is better to compare the most recent data with earlier months, or take a moving average for the past 3, 6 or 12 months to smooth the data. It will tell us if there has been a significant change in trend and whether a new direction is under way.
Timeliness of an indicator is also significant. Although the reported figures are important, it is crucial to recognise that markets react to the variance to the consensus forecast than to the absolute change in the indicator.