In this article I explain some of the commonly used economic indicators that can influence the general direction of the market. When you invest, are new, these indicators will expand your knowledge and your investments. So the next time you hear these words in the media or the financial press, you can use the information in this article in order to assess their potential impact on the economy and, ultimately, your trading strategy.
Beige Book
Formalreferred to as a "summary of comments on current economic conditions" to eight times per year less than 2 weeks will be published before the FOMC meeting on Wednesday at 2:00 pm ET. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from banks and branch managers, and interviews with key businessmen, economists and other sources. The Fed uses this report, together with other indicators to determine the interest rate policy thatFOMC meetings.
If the Beige Book is provided by the inflationary pressures, the Fed can raise rates. Conversely, when there are recessionary conditions, the Fed can lower interest rates.
Source: Web site listed in the resource section.
Chicago Purchasing Managers Index (PMI)
On the last working day of the month at 10:00 am ET Clock released. It is based on surveys of more than 200 purchasing managers regarding the manufacturing industry in the Chicago area towhose distribution of manufacturing firms mirrors the national distribution.
Readings above 50 percent indicate an expanding factory sector, while mean below 50, contraction.
Consumer Confidence Index
On the last Tuesday of each month at 10:00 ET Clock Published data for the previous month. It has conducted a survey of about 5,000 consumers about their attitudes on the current situation and expectations regarding economic conditions.
This report canuseful in determining the changes in consumer behavior and our knowledge about the direction of the economy. This data may be revised each month to complete a survey.
Consumer Price Index (CPI)
To 13th Clock of the month at 8:30 ET Published to the previous month. It measures the change in the price of a representative basket of goods and services such as food, energy, housing, clothing, transportation, medical care, entertainment and education. Also known asThe cost-of-living index.
The variance of the CPI-called core CPI, which excludes food and energy prices, is used primarily for the underlying inflation trend barometer. Inflationary pressure is generated when the core CPI posts larger-than-expected profits.
Source: Web site listed in the resource section.
Producer Price Index (PPI)
Um 11 of each month at 8:30 ET Published clock to the previous monthly figures. The PPI measures the average price of a fixed basket ofInvestment and consumer goods for wholesale.
Similar to CPI, there is a difference of PPI, be called as "core PPI, which excludes prices for food and energy, a clearer picture of underlying inflation trend. Inflationary pressure is generated when the core PPI posts larger-than-expected profits.
Source: Web site listed in the resource section.
Durable Goods Orders
Officially known as "Advance Report on Durable Goods Manufacturers'Shipments and orders "to be published the 26th of the month at 8:30 ET Clock.
This is government index that measures the dollar volume of orders, deliveries and orders of durable goods. Durable goods are new or used items with a normal life expectancy of 3 years or more.
This report provides information on the strength of demand for U.S. manufactured durable goods in national and international markets. If the index rises, it means a growing demand, which results inincreasing production and employment.
Employment
Published on 1 Friday of the month at 8:30 ET for the previous month clock data. In this report, the number of payroll jobs at all non-agricultural enterprises and government agencies. The unemployment rate, average hourly and weekly earnings, and the length of the average working hours are also listed in this report. This report is the single most closely watched economic statistics as an indicator of economicActivity. Therefore, it plays a major role in influencing the psychology of the market during the month.
His hand from the report that the greater the increase in employment, the faster overall economic growth. A rising unemployment rate is associated with a public economy.
If the average income to rise sharply, it can be a sign of possible inflation.
Source: Web site listed in the resource section.
Existing HomeSales
On 25 Clock of the month at 10:00 ET Published data for the previous month. This report measures the selling rate of second-hand stores. As a decent indicator of activity in the area of housing.
This provides a gauge of not only the demand for housing, but the economic momentum. The data are revised every month for the previous month. It may annual revisions for the previous 3 years.
Gross Domestic Product (GDP)
Published in4. Week of the month at 8:30 ET for the previous quarter clock with subsequent changes in the 2 and 3 Month of the quarter published. The GDP measures the dollar value of all goods and services within the boundaries of the United States produces.
This is the broadest measure of the performance of the U.S. economy. A higher GDP growth leads to an acceleration of inflation, while lower growth indicates a weak economy.
Source: Web site listed in the resourceSection.
Housing starts and building permits
By 16 Clock of the month at 8:30 ET Published for the previous month's data. It has begun a measure of the number of housing units on which construction has.
It may be helpful to the changes in GDP ahead. While residential investment is only 4% of the level of GDP, due to its volatility are often at a much higher portion of changes in GDP over relatively short periods of time.
InitialClaims
Published on Thursday at 8.30 clock for week ended prior Saturday. It is a government index that the number of people, registration for the first time claims for state unemployment insurance titles.
Investors use this indicator 4-week average, predict trends in the labor market. A move of 30,000 or more in claims shows a substantial shift of jobs growth. The lower the number of claims, the stronger the labor market and vice versa.
ISM ManufacturingIndex
On 1 Working day of the month at 10:00 ET Clock Published data for the previous month. It is based on nationwide surveys of 300 purchasing managers a total of 20 industries in terms of manufacturing activities. It includes data such as orders, production, employment, inventories, delivery times, prices, export orders and import orders.
It is as an important indicator of the economic production of all indices. Readings of 50% or higher are usually connectedand expansion of manufacturing sector and a healthy economy, while those under 50 evidence of contraction.
ISM Services Index
Also known as Non-Manufacturing ISM is on 3 Working day of the month at 10:00 ET Clock published data for the previous month. This index is based on a survey of about 370 purchasing executives in industries such as finance, insurance, real estate, communications and utility companies are based. It reports on activities in the services sector.
Readingsover 50% indicate expansion in the services sector of the economy. While less than 50% indicate contraction.
Retail Sales
Include in 12 Clock of the month at 8:30 ET Published data for the previous month. This index measures the total sales of goods by all retailers in the U.S.. These figures are in dollars, which means they are not adjusted for inflation. However, that the data are seasonal, holiday-adjusted differences between the months of the year.
Thisregarded as the indicator of the current broad consumer behavior. There is a sense of the trends between the different types of retailers.
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