Macro Accounting
What it is:
Macro accounting, also called national accounting, is a method of calculating the economic activity of a country or region.
How it works (Example):
In the United States, federal government agencies typically use macro accounting to calculate employment rates, inflation rates and many other statistics that indicate how the country's economy is faring. State agencies might also use macro accounting to make similar determinations for states or entire regions.
Why it Matters:
The goal of macro accounting is to summarize the whole economic picture. Accordingly, the markets watch this information closely because it often signals the overall direction of an economy and thus can provide buy and sell signals for a variety of industries or portfolio strategies.
