Moving Average (economics)

A moving average in economics is a statistical method used to smooth out short-term fluctuations in data, such as prices or economic indicators, to identify longer-term trends. It involves calculating the average of a set number of recent data points and then updating this average as new data becomes available, "moving" forward over time. This helps analysts and policymakers see clearer patterns, reduce noise, and make better-informed decisions by focusing on the overall direction rather than daily variations.