Topic Cluster

Economic Indicator Terms

13 terms

Economic indicators are the raw measurements behind composite indexes like the American Distress Index. American Default Research monitors 88 of them — unemployment claims, CPI subcategories, savings rates, delinquency figures — each reflecting a different dimension of the economy as households experience it.

These terms explain how economic health is measured, what the headline numbers actually mean, and why the relationship between indicators matters more than any single number. The ADI currently reads 44.6 (Typical), a composite that measures five domains of household distress against their own history since 2005. On average, its inputs sit higher than in 45% of their own quarterly histories since 2005.

44.6 Typical American Distress Index

Key Economic Indicators and ADI Domains

Indicator What It Measures ADI Domain
Mortgage Delinquency Rate Share of mortgage balances 90 or more days past due Delinquency
Credit Card Charge-Off Rate Share of card balances banks write off as uncollectable Default & Legal
Debt Service Ratio Share of disposable income going to required debt payments Debt Burden
Unemployment Rate Share of labor force without jobs Labor
Initial Claims New unemployment filings per week Labor
Personal Savings Rate Share of income saved after spending Safety Net & Buffer

The five domains carry equal weight, and each series is read against its own history since 2005. See ADI Methodology for the full scoring framework, or Indicator Dashboard for current values across all 88 indicators.

Terms in This Cluster

Consumer Price Index (CPI) The BLS measure of average price changes across 80,000 consumer goods and services — the primary U.S. inflation gauge used for Social Security COLAs and wage adjustments. Cost of Living The money needed to cover basic expenses in a given location — geographic cost variation means the same income creates very different levels of financial security. Federal Funds Rate The Fed's benchmark overnight lending rate between banks — 4.25-4.50% as of early 2026. It directly determines credit card APRs and influences all consumer borrowing costs. Gross Domestic Product (GDP) The total value of all goods and services produced in the U.S. — the broadest economic health measure, though it can mask household-level financial distress. Household Pulse Survey A biweekly Census Bureau survey measuring how economic disruptions affect households, covering expenses, food, housing, employment, and mental health. Inflation The rate at which prices rise over time, reducing purchasing power — when inflation outpaces wages, household financial distress accelerates. Interest Rate The cost of borrowing money expressed as a percentage — when the Fed raises rates, mortgage costs and credit card APRs rise, squeezing household budgets. Labor Force Participation Rate The share of working-age Americans who are employed or actively job-seeking — 62.5% as of early 2026, well below the 2000 peak, hiding millions of discouraged workers. Purchasing Power The quantity of goods a dollar can buy — the U.S. dollar has lost ~18% of its purchasing power since 2020 due to cumulative inflation exceeding 22%. Real Wages Wages adjusted for inflation — measuring whether workers are gaining or losing purchasing power. Real wages only grow when pay increases exceed price increases. Recession A significant decline in economic activity determined by NBER — recessions trigger job losses, income drops, and the delinquency cascades the ADI tracks. Unemployment Rate The percentage of the labor force that is jobless and actively seeking work — the headline U-3 rate understates true labor market weakness captured by the broader U-6. Yield Curve A graph of Treasury interest rates across maturities — when it inverts (short-term rates exceed long-term), it has predicted every recession since 1955.

Related Topics

Financial Hardship Terms How distress is measured at the household level Mortgage Default Terms How delinquency and default are defined and measured Housing Market Terms Housing-specific economic indicators Credit Terms How economic conditions affect credit access
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