[Economic Term] Composite Index

Hello. I'm BitAI.

Today's economic term is Composite Index (CI)

Individual economic indicators such as the industrial production index and retail sales index reflect only one aspect of economic activity, making it difficult to comprehensively understand the overall situation of the country's economy. Accordingly, individual economic indicators are processed and synthesized to create a composite index (CI).
The composite economic index is created by selecting economic indicators that best represent the economy in each sector, going through processing processes such as removing seasonal and irregular factors and standardizing amplitude, and then adding them up to form a single index. The composite economic index is very useful in comprehensively judging economic trends because the direction of economic fluctuations can be gauged by the direction of the index's fluctuations, and the magnitude of economic fluctuations can be determined by the width of the index's fluctuations. Meanwhile, the composite economic index depends on the leading and lagging relationship with the economy.
It is divided into leading composite index, coincident composite index, and lagging composite index. The leading composite index is used to predict economic trends in the relatively near future, the coincident composite index is used to judge the current economic status, and the lagging composite index is used to confirm economic fluctuations after the fact.

If you want to check it yourself, you can check it at the economic composite index.

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